2010 Outlook: One Quarter in the Books

By Eric Jackson
RealMoney Contributor
4/12/2010 12:01 PM EDT
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With the first quarter in the books, it's always illuminating -- and sometimes a little humbling -- to review prior predictions. At the end of last year, I made some stock picks and macro predictions. Here's how they've panned out so far.

Universal Travel Group (UTA - commentary -Trade Now)

I just met with this company on my recent trip to China and wrote about it last week. I still like it moving forward, as it is going after the packaged-tour market in China, and the country's domestic tourism business -- let alone the international one -- is set to boom over the next decade. Since I wrote about the stock in late December, it is down 4.7% vs. the S&P's 6.8% gain.

China Sky One Medical (CSKI - commentary- Trade Now)

A provider of nutritional supplements, including ones for traditional Chinese medicine, CSKI has dropped 27% since my pick. I've learned that the company doesn't have any Chinese-language version of its website. To a large extent, it exists only for the US investor market. I would avoid it moving forward.

China Agritech (CAGC - commentary - Trade Now)

The stock has been on a tear since I picked it -- up 94% this quarter. I like the company and its Chinese organic fertilizer business. I recently met with the company's COO. The problem is valuation -- it's a bit frothy right now. I would wait before getting in.

Puda Coal (PUDA - commentary - Trade Now)

I'm still a big believer in this coking-coal company, which is gaining ownership of more and more coal mines in the Shanxi province of China. The stock is up 77% since my suggestion and just got upgraded last week. There are still good times ahead.

Fuqi International (FUQI - commentary -Trade Now) The stock had a high-profile stumble when it delayed filing its 10K. News last week suggested the company would file it soon, which breathed new life into the stock. Still, it's down 29% since my recommendation. Assuming it cleans up its books, the stock is in a great space as a middle-market Chinese jeweler.

So, some hits and misses in this group. However, if you had taken an equally weighted position in all five stocks, the portfolio would have returned 22%, or triple the return of the S&P 500 over that period.

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Predictions for 2010: China, Dollar, Dow

By Eric Jackson

TheStreet.com Senior Contributor

12/30/2009 10:00 AM EST

Last week, I covered five specific off-the-beaten-path Chinese stocks that I like as long picks for 2010. This week, I provide more-general 2010 predictions.

China Begins to Emerge as the World's Leading Economy

Although China won't be the top dog in terms of gross domestic product, 2010 is going to be the first year we look back on and say that's really when China started to take center stage from the U.S., which will continue to be preoccupied with getting its own domestic economy on the mend.

Many companies in China currently trade at P/E discounts relative to their U.S. peers. In 2010, investors will start to rethink the logic of that, considering that these companies will be growing their earnings at a much faster pace to a foreseeable date much further out in time. Four years from now, it will be the U.S. companies with a lower P/E ratio than their Chinese peers. Other emerging economies, especially India, will show real strength in 2010.

Specific Chinese stock names are in last week's RealMoney column, all of which I hold long positions in.

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China's Undiscovered Gems for 2010

By Eric Jackson
TheStreet.com Senior Contributor
12/23/2009 8:59 AM EST

While there is still broad uncertainty hanging over the largest economies in the world, China's growth story will continue to shine in 2010. This is a country in which gross domestic product is threatening to break 10%. The government policies are all lined up for the march forward to continue. That's a pretty big rising tide to lift a lot of boats.

Investing in some of the smaller-cap names in China always has been risky business for American investors. There are countless examples of a $5 stock today jumping to more than $20 in a matter of weeks. The macro China story, some evidence of company growth, and a relatively interesting story are usually enough to propel smaller Chinese stocks much higher.

However, there are many risks. The same financial controls we take for granted in the West aren't as common for some of the smaller Chinese companies. There are many examples of "related transactions" and family members of entrepreneurial founders who sit on the boards or in key management positions. Boards also aren't typically as strong as in the West (which aren't all that strong to begin with). It's often frustrating for Western investors when they experience subpar investor relations, such as when there's no mention of when a Chinese company is going to release its quarterly earnings. It suddenly appears, leaving the market to react.

That said, it is well worth the effort to comb through what's out there. With a focus on low valuation, growing operating earnings, and in-demand offerings, here are five stocks poised to outperform in 2010.

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