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
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
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.
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