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Friday, April 7, 2017 Stock Pick

Stock Price: $4.99

China Automotive Systems, Inc. is a holding company, which engages in the manufacture and sale of automotive products. Through its subsidiary, it manufactures markets and sells automotive systems and components.

Chinese auto-related companies have been doing well lately with both SORL Auto Parts, Inc. (NASDAQ:SORL) and China Auto Logistic Inc. (NASDAQ:CALI) both having big moves lately. CALI more than doubled from $1.50 to over $4.00. SORL climbed from under $3.20 to over $4.00.

The odd thing is that CAAS hasn't moved yet, but it's at an attractive point in its chart. CAAS has much better financials than CALI. CAAS is the biggest company of the group and not as low float as the other two, but it's due for its move.

CAAS generated a profit last quarter of $6.06 million and is cash flow positive and trading at a PE of only 6.84. Of course, it's trading at the China accounting discount. The main play with CAAS is that it's a SORL and CALI sympathy play and has its 50-day right below at $4.90.

Speculative Score: 3

1 Being the Least Speculative and Most Confident

10 Being the Most Speculative and Possibly the Most Risky

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