Wednesday, February 2, 2011

Chinese Agricultural Stocks

I'm very bad a picking stocks, and that's why I usually invest in mutual funds or ETF. However, there are two Chinese agricultural stocks that intrigues me.

The first one is Chaoda Modem (0682.HK) , a grower of fruits and vegetables in China. It has not performed well, even with the recent run up in prices, is profitable and offers a very low P/E of 4. This stock has also been picked by Peter Schiff. Here's the 5 year chart.

We can see the stock has done nothing for 5 years although profits have constantly improve. The stock got hammered in August 2010 after it made a stock offering and diluted the shares.

The second stock is Sinofert (0297.HK), a company specialized in Potash production and trading. It is a subsidiary of Sinochem a conglomerate in China. Following the collapse of the price of Potash (Potassium Chloride), the company reported loss in the past two years. However, potash price has not gone up with the price of agriculture commodities and if the price of the latter stays high, I expect potash price will follow. Here's the 5-year chart of Sinofert, it has made a decent 100% return over the period.

Let me know what you think of those stocks trading in the Hang Seng (Hong Kong Stock Exchange).

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