4 Chinese Stocks That Are Cheaper Than You Thinkhttp://www.fool.com/investing/general/2012/01/11/4-chinese-stocks-that-are-cheaper-than-you-think.aspx Rick Aristotle Munarriz
January 11, 2012
Focus Media (Nasdaq: FMCN ) has had enough.
Shares of the Chinese advertising giant rose nearly 10% yesterday, after the company agreed to return 25% of its adjusted earnings to its shareholders the following year in the form of quarterly dividends. Based on the $1.83 a share that analysts see Focus Media earning in 2011, we're looking at a yield of 2.2%. The good news is that if we go by the $2.24 a share that Wall Street is targeting, adjusted profits out of Focus Media this year the yield would pop up to 2.7%, based on yesterday's close.
Focus Media isn't doing this to be generous. After going a few rounds of refuting bearish claims in a scorching Muddy Waters report -- accusing the company of overstating the size of its advertising network among other things -- Focus Media feels that it's best response now is to simply show its investors the money.
It's a smart move. It may not silence the knocks entirely, but it's hard to knock a company for its accounting practices if it's returning a good chunk of its earnings to its shareowners.
China gets cheap
I'm going to dive into a few of my favorite Chinese growth stocks that are a lot cheaper now than they were a year ago. The combination of three things -- growing earnings in 2011, falling share prices in 2011, and healthy expectations for growth in 2012 -- make these stocks that should be going off on your radar if you're willing to take on the risk.
Let's get to it.