5-Star Stocks Poised to Pop: China Information Technology

Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, geographic information systems (GIS) software specialist China Information Technology (Nasdaq: CNIT  ) has earned a coveted five-star ranking.

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

China Information facts

Headquarters Shenzhen, China
Market Cap $275.4 million
Industry Application software
Trailing-12-Month Revenue $134.18 million
Management Chairman/CEO Jiang Lin
CFO Qiang Kazmerzak
Return on Equity (Average, Past 3 Years) 25%
Cash/Debt $18 million / $67.8 million
Competitors Autodesk (Nasdaq: ADSK  )
China TransInfo Technology (Nasdaq: CTFO  )
Adobe Systems (Nasdaq: ADBE  )

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 98% of the 606 members who have rated China Information believe the stock will outperform the S&P 500 going forward. These bulls include ob3y and All-Star TraderMRW, who is ranked in the top 10% of our community.

About two months ago, ob3y touched on the tailwinds working in China Information's favor:

There is a push to move additional manufacturing to inland China as the traditional coastal cities reach capacity. As the new cities reach urbanization over the next few years there's a large chance of this company grabbing some key government contracts. Even without, it's trading near its 52 week low ... and a huge chunk of it is owned internally.

China Information remains a seemingly inexpensive way to go for growth. While the company is expected to grow earnings (23% per annum over the next five years) at a faster clip than rival GIS specialists Autodesk (16.4%), Adobe (12.7%), and China TransInfo (22%), as well as bigger software plays like Microsoft (Nasdaq: MSFT  ) (9.9%) and Oracle (Nasdaq: ORCL  ) (14.9%), its shares sport a particularly paltry P/E of 7.8.

CAPS All-Star TraderMRW elaborates on the bull case:

Solid company selling on the cheap right now. ...

The technology infrastructure buildout is in its infancy in China and this company is going to be one of the key beneficiaries.

Recent evidence of this is their [State Grid Corp. of China] contract win. They are the SOLE domestic supplier of GIS services to the largest grid company in China. This is a 10 year, multi-billion $ project.

Buy, hold and enjoy the rich returns over time.

What do you think about China Information, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Microsoft is a Motley Fool Inside Value pick, and Motley Fool Options has recommended a diagonal call position on it. Adobe is a Motley Fool Stock Advisor selection, and Motley Fool Options has also recommended a diagonal call position on it. The Fool owns shares of Microsoft, Oracle, and Autodesk. The Fool has also written covered calls on Autodesk. Try any of our Foolish newsletter services free for 30 days.

True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Fool's disclosure policy always gets a perfect score.


Read/Post Comments (1) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 25, 2011, at 10:32 AM, clayman14 wrote:

    Really on the cheap now! Wish I could dollar cost average down on my CAPS trade.

Add your comment.

DocumentId: 1386942, ~/Articles/ArticleHandler.aspx, 4/16/2014 6:59:04 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement