China Growth Stocks

[ratobranco]

Forbes MCOX pump

http://www.forbes.com/sites/ericjackson/2011/09/01/mecox-lane-is-a-bargain-here/

The folks here who are desperately in search of a US-listed Chinese stock in which to sink money should look at MCOX, as I said awhile back. This company is extremely cheap on a valuation basis. It may go to zero, but it could also go to $10. And unlike the rest of the garbage trading in this space, it's not a fraud, as it has received large equity investments from SINA as well as Dongxiang (at much higher prices than the current price). Those are two very well-known and well-respected Chinese companies. Unlike US investors, they aren't going to be fooled by exported scams, so the fact that they put real money in this company (at $6, with the share price at $2.40 right now) means they know it's not just another RTO/IPO fraudcap like CCME or CTE seeking to get rich off of US enthusiasm for all things "China."

If I were bullish on the overall markets, I would start a small momentum-based trading position now, then wait for the coming earnings report, and if it indicates a turnaround in the business and is well-received by the market, then I would build a more serious position. It's difficult for American investors to understand and analyze the trends in a business like this, given that we aren't on the ground to read the pulse of Chinese consumer trends, that is why technicals are important to watch. If this stock puts out what appears to be a good earnings report, and then starts showing price strength with volume, then you want to get in on that as quickly as possible.

As it turns out, I'm not bullish at all, I think the markets are very dangerous here and headed much lower over the next year, including China and the emerging markets. The evidence for a coming global recession continues to build, and if that is the outcome, MCOX will get slaughtered like everything else. So I intend to wait for more carnage and a cheaper price.