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5-Star Stocks Poised to Pop: China Medical

Based on the aggregated intelligence of 120,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, health-care equipment maker China Medical Technologies (NYSE: CMED  ) 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 China Medical's business and see what CAPS investors are saying about the stock right now.

ChinaMedical facts

Headquarters (founded)

Beijing, China (1999)

Market Cap

$502.15 million

Industry

Medical Instruments & Supplies

TTM Revenue

$144.6 million

Management

Founder/CEO Xiaodong Wu

CFO Takyung Tsang

TTM Return on Equity

26.1%

Dividend Yield

2.6%

Competitors

Johnson & Johnson (NYSE: JNJ  ) ,

Abbott Labs (NYSE: ABT  )

CAPS members bullish on CMED also bullish on

Suntech Power (NYSE: STP  ) ,

China Mobile (NYSE: CHL  )

CAPS members bearish on CMED also bearish on

China Finance Online (Nasdaq: JRJC  ) ,

China Unicom (NYSE: CHU  )

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

Over on CAPS, fully 1,163 of the 1,191 members who have rated China Medical -- some 98% -- believe the stock will outperform the S&P 500 going forward. These Foolish bulls include lilly21 and ETFinnovators.

In October, lilly21 updated our community on some of the stock's developments: "Two new additions to their product line. They are awaiting FDA approval here and in Europe. They have approval in asia for their HIFU, FISH and skin diagnostic system. A no brainer long term."

In a pitch from last week, ETFinnovators chimed in on China Medical's recent purchase of a human papillomavirus (HPV) detection system:

China Medical is trading near its IPO levels of August 2005 despite excellent growth prospects and is a buy below 20 bucks with a dividend yield of 2.5% and market cap of $540M as uncertainty over a $345M acquisition has spooked some investors, sending the stock down sharply by over 50% in the past three months. The acquisition provides [China Medical] with a molecular diagnostics platform for HPV, including strains that cause cervical cancer – which is an estimated $700M market in China alone.

What do you think about China Medical, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 120,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Johnson & Johnson is a Motley Fool Income Investor pick. Suntech Power and China Finance Online are Rule Breakers selections. The Fool's disclosure policy always gets a perfect score.


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2/14/2012 4:00 PM
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