By Paul Goodwin, Analyst and Editor of Cabot China & Emerging Markets Report
From Cabot Wealth Advisory, 6/17/10. Sign up for free Cabot Wealth Advisory e-newsletter
Big investment companies love consistent revenue and earnings growth, especially because this consistency allows them to project future growth with confidence. When you're trying to predict anything about the future, confidence is a precious commodity.
Longtop Financial Technology (LFT) is a Chinese provider of software and IT solutions to the financial sector in China. The company's products help run bank teller machines (ATMs), control customer relationship management (CRM) and let financial firms mine customer information for information that will enhance revenue and increase client satisfaction. The company also just signed an agreement with Netezza (NZ) to provide integrated data warehousing services in China.
The bottom line, though, is the bottom line, which has been growing steadily for a long time. Both revenue and earnings have each been growing at a 30% or better rate for the last 11 quarters. (OK, so Q3 2009 earnings were up only 29%. Don't get picky!)
The company has no debt to speak of and the forward P/E of 21 seems entirely reasonable, given the growth of the Chinese financial sector.
The chart for LFT shows a stock that has been drifting slowly downward since January, but has caught an upwind since June 9 and is now trading above its 25- and 50-day moving averages on rising volume.
I had LFT in the Cabot China & Emerging Market Report portfolio in April, following a short stay on our Watch List. We sold it for a small profit in July after the stock corrected from 29 to 22. If this rally continues, it may make another trip to the Watch List. Then we'll see.
Editor's Note: If you'd like to invest in a host of other strong stocks from China, India, Brazil and the rest of the developing world, a subscription to the Cabot China & Emerging Markets Report will give you a front row seat. It can be a profitable decision, as the Report is the top performer over the last five years out of all 142 investment newsletters followed by the Hulbert Financial Digest. Click this link to sign up: Cabot China & Emerging Markets Report
Paul Goodwin
Emerging Markets Specialist, Analyst and Editor of Cabot China & Emerging Markets Report
A researcher and writer for over 30 years, Paul Goodwin has been a member of the Cabot investment team and editor of Cabot China & Emerging Markets Report since 2005. Under Paul’s stewardship, Hulbert Financial Digest rated Cabot China & Emerging Markets Report the number-one-rated newsletter of 2006 with a 78.6% gain for the year, the number-one-rated newsletter of 2007 with a 74.1% return, and the top-performing investment adivsory for five years with a 17.9% annual return.
By Paul Goodwin, Analyst and Editor of Cabot China & Emerging Markets Report
From Cabot Wealth Advisory, 4/22/10. Sign up for free Cabot Wealth Advisory e-newsletter
Big investment companies love consistent revenue and earnings growth, especially because this consistency allows them to project future growth with confidence. When you're trying to predict anything about the future, confidence is a precious commodity.
Longtop Financial Technology (LFT) is a Chinese provider of software and IT solutions to the financial sector in China. The company's products help run bank teller machines (ATMs), control customer relationship management (CRM) and let financial firms mine customer information for information that will enhance revenue and increase client satisfaction. The company also just signed an agreement with Netezza (NZ) to provide integrated data warehousing services in China.
The bottom line, though, is the bottom line, which has been growing steadily for a long time. Both revenue and earnings have each been growing at a 30% or better rate for the last 11 quarters. (OK, so Q3 2009 earnings were up only 29%. Don't get picky!)
The company has no debt to speak of and the forward P/E of 21 seems entirely reasonable, given the growth of the Chinese financial sector.
The chart for LFT shows a stock that has been drifting slowly downward since January, but has caught an upwind since June 9 and is now trading above its 25- and 50-day moving averages on rising volume.
I had LFT in the Cabot China & Emerging Market Report portfolio in April, following a short stay on our Watch List. We sold it for a small profit in July after the stock corrected from 29 to 22. If this rally continues, it may make another trip to the Watch List. Then we'll see.
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