4-Star Stocks Poised to Pop: Xinyuan Real Estate

By Brian D. Pacampara | More Articles
April 15, 2011 | Comments (2)

Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Chinese residential real estate developer Xinyuan Real Estate (NYSE: XIN ) has earned a respected four-star ranking.

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

Xinyuan facts

Headquarters (Founded)	Beijing (1997)
Market Cap	$170 million
Industry	Real-estate development
Trailing-12-Month Revenue	$450 million
Management	Founder/Chairman/CEO Yong Zhang CFO Thomas Gurnee
Return on Equity (Average, Past 3 Years)	4.9%
Cash/Debt	$248.1 million / $295.9 million

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

On CAPS, 97% of the 670 members who have rated Xinyuan believe the stock will outperform the S&P 500 going forward. These bulls include beststockpikker and valuehunter007.

Just last month, beststockpikker tapped Xinyuan as an overlooked bargain opportunity: "Extremely oversold. Balance sheet and fundamentals continue to improve, but hasn't been noticed yet. It will."

In fact, Xinyuan currently sports a particularly paltry price-to-book of 0.3. That represents a clear discount to U.S. counterparts like D.R. Horton (NYSE: DHI ) (1.4), Lennar (NYSE: LEN ) (1.3), and PulteGroup (NYSE: PHM ) (1.4).

CAPS member valuehunter007 expands on the outperform argument:

Growth play. There is lot of cloud surrounding China Real Estate boom and government's plan to slow the growth. On the long run, this company is better placed for growth than many others in China Real Estate. ... Negatives seem to have been already reflected. Their target market is more of second tier but fast growing chinese towns.

What do you think about Xinyuan, 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!

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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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 icon found on every comment.

Report this Comment On April 15, 2011, at 9:56 AM, kariku wrote:

YONG was also poised to pop ... above 6 ... couple of weeks ago ... Look at it now!
Report this Comment On April 15, 2011, at 10:02 AM, buffalonate wrote:

If you think Chinese real estate is a good place to invest you should read the Time magazine story about the empty cities their government builds to hit their growth targets. I don't know if their real estate market can crash considering the government owns the banks that do the lending.

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