Dear Fellow Investor,
When you're right, you're right. In last week's Inside China Dispatch, we talked about the upcoming earnings of my favorite education company. My exact words were: "Now is the time to buy this education company, and investors who wait until after the earnings report will be sorry that they let the next wave of profits slip through their fingers."
Just as I expected, earnings came in ahead of last quarter, and as a result, shares of the stock popped. Investors who purchased the stock on my recommendation before the earnings announcement made quick gains of 12.5%! That means my China Strategy subscribers have banked total gains of 212% since I first recommended the company less than a year ago.
Make no mistake—this is not a fluke. I put a lot of research into each recommendation to find innovative companies that are profiting from the world's fastest-growing economy—China. Investing in China can be tricky, but the companies that I find have delivered quarter after quarter of strong growth and are positioned to continue beating expectations.
This education company was just one of many that I expect to report positive earnings. In order to take full advantage of the profits that earnings season offers, you must act quickly. Click here to get instant access to my entire China Strategy portfolio—as well as specific buy advice for each stock.
China-Driven Growth
Last week, one of the core holdings in our China Strategy portfolio reported another outstanding quarter. Profits climbed a higher-than-expected 17%, and the announcement caused shares to jump 11% over the next two days.
What was behind this company's impressive profits? China, of course. This American company saw a whopping 31% increase in revenue from China. Meanwhile, its revenue from the United States fell 6%.
And this company is not unusual. Just a couple of short months ago, a wireless monopoly in our portfolio announced a better-than-expected 25% jump in first-half profits. The earnings windfall resulted in shares surging nearly 8%. The chairman of the company said its success was due to the continued rapid growth in China's economy, rising consumer purchasing power and the development of rural areas.
These are only two examples of how the China Miracle directly affects earnings and translates into big profits. But in some cases, China's staggering growth affects earnings indirectly. I'd like to go over one indirect example now.
| Six Earnings Plays to Buy Now |
| Here's a look at some of our China Strategy companies that will be announcing earnings soon:
Become a member now to get complete details on these and 17 other top China stocks! |
Apple: An Unlikely China Play
As you probably know already, tech giant Apple (NASDAQ: AAPL) reports earnings on Monday. And if you've been with us here at Inside China Dispatch for a while, you know that I'm a fan of the company.
Apple benefits tremendously from China's low-cost manufacturing. Did you know that all of Apple's iPods are made in China and Taiwan? Apple designs its products at its headquarters in Cupertino, California, and then outsources the manufacturing to China. This keeps profit margins impressively high.
I've been recommending AAPL to my China Strategy readers for some time now, and the stock has taken off—up 91% in the last six months alone. It's a great example of a U.S. company producing big profits thanks in large part to China's growth.
And I'm expecting big numbers from the company on Monday. Apple should report an impressive fourth-quarter because this will be the first entire quarter that will account for sales of the company's nifty new iPhone.
Also during the quarter, the company released a couple of hot new products that should help boost revenues. Apple launched a redesigned version of the iPod nano, which now includes a video display and comes in five new colors. In addition, the company unveiled a brand new product—the iPod touch—that has a touch-screen similar to the sleek iPhone. Steve Jobs calls the iPod touch "a landmark" because it's the first of the iPods to include wireless Internet access.
With all of these new gadgets, Apple is sure to have an impressive quarter. For my specific buy advice on AAPL, click here. I'm expecting shares to take off after the earnings announcement, and the stock will continue its strong performance in the next quarter during the holiday shopping season.
As I've mentioned, Apple is not the only China Strategy holding that I expect to have strong earnings. Three other China Strategy companies will announce results within the coming week, and at least three more are scheduled to report in the next month—and they should all come in above consensus estimates. Don't miss out on another profitable earnings season. Join China Strategy today!
