Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, surveillance products specialist China Security & Surveillance Technology (NYSE: CSR ) has earned a coveted five-star ranking.
With that in mind, let's take a closer look at China Security's business and see what CAPS investors are saying about the stock right now.
China Security facts
| Headquarters |
Shenzhen, China |
| Market Cap |
$476.8 million |
| Industry |
Security and protection services |
| Trailing-12-Month Revenue |
$653.41 million |
| Management |
CEO Guoshen Tu (since 2005)
CFO Wing Khai Yap (since 2007)
|
| Return on Equity (Average, Past 3 Years) |
14.4% |
| Cash/Debt |
$185.7 million / $260.6 million |
| Competitors |
General Electric (NYSE: GE )
Honeywell International (NYSE: HON )
|
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 98% of the 1,542 members who have rated China Security believe the stock will outperform the S&P 500 going forward. These bulls include All-Stars mrindependent and metoo105, both of whom are ranked in the top 2% of our community.
Just last week, mrindependent tapped the stock as a relatively secure selection:
At [4.5] times expected earnings [China Security] looks like a buy. The balance sheet is sound, historical and projected sales are terrific. The auditor, GHP Horwath, is a leading Colorado accounting firm. I would prefer an auditor of international stature, but I am sure GHP Horwath is competent.
Uninspiring sales growth and value-diluting stock offerings have weighed heavily on China Security's shares in 2010, but many Fools in our community think they're cheap enough to take a chance on. The stock currently sports an almost unbelievable PEG of 0.3, representing a huge discount to industrial behemoth foes General Electric (1.1) and Honeywell (1.1), as well as other security service plays like Brinks Co. (NYSE: BCO ) (1.3) and GEO Group (NYSE: GEO ) (1.1). With such an attractive valuation, CAPS All-Star metoo105 seems willing to overlook management's questionable capital-raising efforts:
The company is a leader in a growing area. If you pooh-poohed every pick in China because the managers don't seem to get basic principles of capital allocation, you'd not be left with any universe at all. So until Chinese managers have more time to adjust, I'll forgive them these and other sins and recognize the upside here is a ten-bagger, while the downside is a near total loss of capital. ... The expected value of this company is a 2.5 bagger, which is good enough for me.
What do you think about China Security, 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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