4-Star Stocks Poised to Pop: Gushan Environmental Energy

Based on the aggregated intelligence of 115,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Chinese biodiesel fuel producer Gushan Environmental Energy (NYSE: GU  ) has earned a respected four-star ranking. While five-star stocks have been the best performers, our data has shown that four-star stocks still outshine the market by a significant margin and shouldn't be taken lightly; conversely, low-rated stocks have woefully lagged the market average.

With that in mind, let's take a closer look at Gushan Environmental's business, and see what CAPS investors are saying about the stock right now.

Gushan Environmental facts

Headquarters (Founded)

Fuzhou City, China (2001)

Market Cap

$870 million

Industry

Specialty Chemicals

TTM Revenue

$158.4 million*

Management

Founder and CEO Jianqiu Yu

CFO Ngai Chi Chan

Major Competitors

China Petroleum & Chemical (NYSE: SNP  )

PetroChina (NYSE: PTR  )

CAPS members bullish on GU also bullish on

Chesapeake Energy (NYSE: CHK  )

Suntech Power (NYSE: STP  )

CAPS members bearish on GU also bearish on

VeraSun Energy (NYSE: VSE  )

JA Solar (Nasdaq: JASO  )

Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.
*Through 3/31/08.

Over on CAPS, fully 89 of the 97 All-Star members who have rated Gushan Environmental -- some 92% -- believe the stock will outperform the S&P 500 going forward. These All-Star bulls include madcowmonkey and TheHarm, both of whom are ranked in the top 16% of our community.

In April, madcowmonkey noted:

Biodiesel might be a speculative call in China, but the company's platform may change in the future with China being scrutanized of their polluting practices. Biodiesel has a future in China and I don't just believe [Gushan] will outperform the S&P, but will be a long term outperforming stock that some will wish they had chosen 5 yrs from now.

A more recent pitch from TheHarm last month shared that bullish sentiment, further emphasizing China's need to get clean:

China has pollution problems and this is one of the solutions (and the are no real clear competitors). This company's numbers are stellar and they have been expanding at a nice clip. I expect this trend not only to continue but to continue with additional fervor as this segment of the market continues to heat up. China will only increasingly become more and more aware of the fact that they need to clean up their environment and this company stands to benefit from that awareness. Also, take into account an emerging middle-class that wants to drive more and more, and bio-diesel becomes more and more of an answer.

What do you think about Gushan Environmental, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 115,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.

Chesapeake Energy is a Motley Fool Inside Value recommendation. Suntech Power is a Rule Breakers selection. Try any of our Foolish newsletter services, free for 30 days, and let the Fools show you how to make the most of today's market.

Foolish contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool's disclosure policy always gets a perfect score.


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