China Automotive Systems Q4 07 Results

By: ispeculatornew
Date posted: 03.29.2008 (5:39 pm) | Write a Comment  (4 Comments)

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CAAS – China Automotive Systems (Nasdaq) – (Closing Price – $5.73) 

China Automotive Systems reported fourth quarter results on Tuesday March 25 and reported sound results.

China Automotive Systems came in with revenue of 37.71 million and earnings per diluted share of 0.09. Revenue for the quarter was up 36% year over year and up 21% sequentially. EPS was up from 0.06 last year but was down from the prior two quarters. The company said EPS in the fourth quarter was hurt by higher R&D and SG&A expenses. For the full year diluted EPS improved 76% to 0.37 from 0.21 last year.

The stock price of China Automotive Systems hit a 52 week low of $4.40 just before earnings but has rebounded nicely since. At Friday’s closing price the company is trading at a trailing PE of 15. This is much cheaper than the company has traded at in the past two years.

China Automotive Systems, like most small caps, is trading at discounted levels because big investors have fled so called “riskier stocks” due to concern over the economy. Small caps may continue to trade at discounted levels until the economy starts to rebound but I think it would be wise to start picking up shares of these companies while they are trading at depressed levels.

For the time being I am going to recommend to continue holding shares of China Automotive Systems. However, if the company does start to sell off again I will give another buy recommendation at a lower price.

Disclaimer: I have no position in CAAS.

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  1. Comment by Eve — April 1, 2008 @ 8:57 am

    Nice recommendation!

  2. Comment by Eve — April 2, 2008 @ 11:35 am

    Do you recommend to buy CAAS under $6?

  3. Comment by admin — April 2, 2008 @ 9:31 pm

    Yes, I would still recommend to buy CAAS at the current price.

  4. […] Recommendations: CAAS – China Automotive Systems: China Automotive Systems reported sound Q4 results on March 25 and the stock price has rebounded quite a bit from its lows. Today, the company […]

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