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5-Star Stocks Poised to Pop: Guangshen Railway

By Brian D. Pacampara, CFA - Updated Apr 5, 2017 at 6:56PM

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Market-trouncing returns could be written in this 5-star.

Based on the aggregated intelligence of 120,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Chinese railroad operator Guangshen Railway (NYSE:GSH) 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 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

$1.72 Billion

Management

Chairman He Yuhua (Since June 2007)

General Manager Shen Yi (Since October 2008)

Return on Equity (Average, Past Three Years)

5.8%

CAPS Members Bullish on GSH Also Bullish on:

Apple (NASDAQ:AAPL)

Aluminum Corp. of China (NYSE:ACH)

China Mobile (NYSE:CHL)

CAPS Members Bearish on GSH Also Bearish on:

PetroChina (NYSE:PTR)

Citigroup (NYSE:C)

Ford Motor (NYSE:F)

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 521 of the 538 members who have rated Guangshen -- some 97% -- believe the stock will outperform the S&P 500 going forward. These Foolish bulls include CAPS All-Star Theresewin and coregonus.

Last week, Theresewin urged our community to ride Guangshen all the way to gains: "[Get] on board while you still can ... China NEEDS its rail system to better integrate its country and is investing big bucks to do so!"

In a pitch from last month, coregonus agreed and elaborated on the strong long-term trends supporting the stock: 

Backing up my faith in railways, and that China is totally committed to rail in the long term -- if you have ever ridden their hi speed mag-lev train in Shanghai you get the depth of their commitment -- they know not everyone will have cars, it would not work there. As more cities get built out, trains will too -- and at the end there are real assets in the train business and freight on rail has very long legs (or tracks).

What do you think about Guangshen, 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.

On Jan. 12, 2009, Fool co-founder David Gardner, Jeff Fischer, and their Motley Fool Pro team will accept new subscribers to their real-money portfolio service. Motley Fool Pro is investing $1 million of the Fool's own money in long and short positions in a range of securities, including common stocks, put and call options, and exchange-traded funds (ETFs). They also incorporate proprietary CAPS "community intelligence" data into their research. To learn more about Motley Fool Pro and to receive a private invitation to join, simply enter your email address in the box below.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Guangshen is a Motley Fool Hidden Gems Pay Dirt pick. Apple is a Stock Advisor selection. The Fool's disclosure policy always gets a perfect score.

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Stocks Mentioned

Guangshen Railway Company Limited Stock Quote
Guangshen Railway Company Limited
GSH
Apple Inc. Stock Quote
Apple Inc.
AAPL
$165.35 (-0.14%) $0.23
Ford Motor Company Stock Quote
Ford Motor Company
F
$15.30 (-0.46%) $0.07
Citigroup Inc. Stock Quote
Citigroup Inc.
C
$51.66 (0.78%) $0.40
China Mobile Limited Stock Quote
China Mobile Limited
CHL
PetroChina Company Limited Stock Quote
PetroChina Company Limited
PTR
$43.83 (-0.27%) $0.12
Aluminum Corporation of China Limited Stock Quote
Aluminum Corporation of China Limited
ACH
$9.07 (3.19%) $0.28

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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