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Savings Experiment: Snow Removal"We're finding positive opportunities in Asia," says Richard Schmidt. In his Stellar Stock Alert, he looks to a play on China's infrastructure: Rino International (RINO).
"China is very aware of the need for infrastructure to power economic growth. The better your energy production and transportation systems, the better your economy is going to do.
"As a result, China has made a massive investment into expanding and shoring up its infrastructure. We see this as a major investment opportunity.
"But instead of investing in companies that are specific developers, such as road developers or power-plant builders, we like to invest in companies that play a role in every aspect of development.
"We did this many years ago when the U.S. was undergoing substantial infrastructure improvements. Instead of investing in specific developers, we invested in Caterpillar. The tractor company was supplying equipment to all of the developers and saw a huge increase in business.
"In much the same way, RINO International is a leader in environmental protection equipment for the iron and steel industry in China.
"RINO designs wastewater treatment, flue gas desulphurization equipment, and high temperature anti-oxidation systems, which are all designed to reduce either industrial pollution and/or improve energy utilization.
"As the economy of China grows, it will need more and more metal to build everything from bridges to subways, power plants to water treatment plants.
"All of them will require massive amounts of iron and steel. Every company involved in the country's infrastructure will likely use RINO in some way. This is an awesome opportunity to profit from China's growth.
"Best of all, we've got a window to buy the stock at a discount. It's been moving up steadily since last November. But in October, the stock dropped hard.
"While the drop hasn't done any real damage to the stock, it does give us the opportunity to buy in at a cheap price. We're buying RINO up to $30 and expect it to hit a target price of $40."
Steven Halpern's TheStockAdvisors.com offers a free daily overview of the favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.
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Reader Comments (Page 1 of 1)
11-27-2009 @ 1:24AM
Jason said...
I do like RINO. Excellent article and thanks for the stock pick! Their most recent financials as of sep 30th 2009 show their revenue increasing to $63M from $41M of the previous quarter. However, the change in cash to ($22M) from $4M prior quarter is a bit of a concern. They had a $41M use of cash classified as "other operating activites". Not sure what this is.
Jim M
http://www.stocktrendalerts.com