Based on the aggregated intelligence of 115,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Chinese coal-based chemical maker ShengdaTech (NASDAQ:SDTH) has earned a coveted five-star ranking. Our data has shown that five-star stocks outperform the market by a significant margin; conversely, one-star stocks have woefully lagged the market average.

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

ShengdaTech facts

Headquarters (Founded)

Tai’an City, China (2005)

Market Cap

$448.25 million

Industry

Specialty Chemicals

TTM Revenue

$124.19 million

Management

CEO Xiangzhi Chen (since 2006)
CFO Anhui Guo (since 2006)

Return on Equity (average last two years)

37.35%

Competitors

LSB Industries (AMEX:LXU)

CAPS members bullish on SDTH also bullish on

Aluminum Corp. of China (NYSE:ACH)
Vale (NYSE:RIO)

CAPS members bearish on SDTH also bearish on

iMergent (AMEX:IIG)

Sources: Capital IQ, a division of Standard & Poor's, Yahoo! Finance, and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, fully 156 of the 157 the All-Star members who have rated ShengdaTech -- some 99% -- believe the stock will outperform the S&P 500 going forward. These All-Star bulls include jsbradley123 and TheGreatFoolish1, both of whom are ranked in the top 15% of our community.

In December, jsbradley123 listed a few of the stock's bullish points: "Growing NPCC (nano percipitated calcium carbonate) production capacity, stable cash flow from the chemicals segment, overwhelming market share in a market that is growing exponentially, relatively low earnings multiples with a solid growth rate."

A more recent pitch by TheGreatFoolish1 last month follows that bullish line of thinking, recapping some of Shengda's latest analyst-topping results:

[T]hey just smashed earnings, made a nice acquisition that should compliment their cash cow chemical business, and they are continuing to grow their NPCC output nicely. I think this is a great small cap that will continue to move up for an extended period of time. They just had earnings of .18 a share vs. estimates of .145 due to starting production on the 60,000 tons of npcc they just built, but the production was not 100% during the quarter. They are now at 100%, so i suspect that next quarter should be even better, which would include another large beat of the current estimate at .15. I predict this will hit last years highs by the end of the year.

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