I have found another interesting Chinese stock that is just too cheap to ignore. They just keep luring me in! I can’t help it, there is just nowhere else in the world where you can buy stocks at these absurd valuations right now. Almost half of my portfolio is now in Chinese stocks.
You can guess the company name based on the following characteristics:
A compounder with a sizable and growing moat and a long growth runway.
Currently trades at an estimated 7x 2024 earnings.
Returning capital through buybacks.
Significant room for margin expansion.
Most of its market cap is net cash.
In the recycling business.
Chinese stocks and pharmaceuticals both look incredibly mispriced at the moment. I will have one, and possibly two write-ups on US traded pharma stocks soon as well (behind paywall). They are not liquidations, but actually pharma companies with promising product(s) and profits already. I remember saying to myself a year ago that pharma stocks are outside my circle of competence. But when an asset class gets to a certain absurd level of cheapness, I think that matters less and less.
Disclaimer: Readers of this blog should do their own due diligence before buying or selling any of the mentioned stocks, since I have been wrong before and cannot guarantee all information in this write-up is 100% factual. I may buy or sell the above mentioned stocks at any time. I am not your financial advisor. Past success is no guarantee for future success.
But now first let’s get into…