Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Chinese railroad operator Guangshen Railway (NYSE: GSH ) has earned a respected four-star ranking.
With that in mind, let's take a closer look at Guangshen's business and see what CAPS investors are saying about the stock right now.
Guangshen facts
| Headquarters (Founded) |
Shenzhen, China (1996) |
| Market Cap |
$2.65 billion |
| Industry |
Railroads |
| Trailing-12-Month Revenue |
$2.05 billion |
| Management |
CEO Shen Yi (since 2008)
Chief Accountant Tang Xiangdong (since 2008)
|
| Return on Equity (Average, Past 3 Years) |
5.9% |
| Cash/Debt |
$495.6 million / $526.6 million |
| Dividend Yield |
3.1% |
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 97% of the 787 members who have rated Guangshen believe the stock will outperform the S&P 500 going forward. These bulls include Stoneybrook100 and s4lt15.
This month, Stoneybrook100 tapped Guangshen as a solid way to earn some income: "Dividend paying Chinese railroad servicing near Hong Kong with a proven track record. Attractive for those looking to invest in China but nervous about smoke and mirrors accounting."
Currently, Guangshen even trades at a cheapish price-to-cash flow of 5.8. That represents a clear discount to North American counterparts Canadian National Railway (NYSE: CNI ) (11.4), CSX (NYSE: CSX ) (9.5), and Union Pacific (NYSE: UNP ) (12.1).
CAPS member s4lt15 elaborates on the bargain opportunity:
It trades below book value ... features a low .15 debt/equity ratio and 11% profit margin. The company will naturally benefit from rising chinese domestic consumption, as well as from rising oil prices. Thus this pick reflects a positive outlook on the chinese economy, and on the prospects of a currently undervalued stock with excellent prospects to benefit from future chinese (and global) economic growth.
What do you think about Guangshen, 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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