Why China XD Plastics Co. Ltd. Shares Jumped

Is this meaningful or just another movement?

May 14, 2014 at 4:26PM

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of China XD Plastics (NASDAQ:CXDC) were up as much as 10% today after the company turned in a strong first-quarter earnings report this morning.

So what: The auto-parts supplier said earnings per share increased nearly 50% to $0.34, while sales improved 30.8% to $223.6 million. The increase in sales came in part from a 14% uptick in selling prices as demand for automotive polymer composite materials rose. Earnings estimates were unavailable, but this report certainly makes the stock (with a P/E of about 4) look cheap on an earnings basis. 

Now what: CEO Jie Han said the quarter reflected China XD's "strong execution of solidifying our leading position in the marketplace," and noted that higher prices helped drive a 380-basis-point jump in gross margin to 20.9%. The company also maintained its guidance for the year, calling for revenue of $950 million to $1.05 billion and earnings per share of $1.54 to $1.85. With solid financial results across the board, two Morgan Stanley affiliates on its board (which adds credibility to the stock), and a dirt cheap valuation, shares could easily move higher from here. 

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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