Sorl Auto Parts, Inc. (NASDAQ:SORL)

bofors (< 20) Submitted: 10/1/2010 10:38:14 AM : Start Price: $8.58 SORL Score: -82.04

This is a brief outline of how and why I selected SORL to outperform:

(1) SORL appears maintained a floor at $8 since May and has otherwise clearly oscillated to the $9 or $10 range.

(2) SORL almost reached $13 in January.

(3) SORL slipped at the end of June and since appears on a slight up swing.

(4) SORL's has a relatively low P/E ratio at about 9.

(5) SORL's revenue is growing at a rate of about 70% and income is growing at about 80%.

(6) Although SORL's products are air brakes for commercial trucks, it is still part of the nascent Chinese automotive industry, which is expected to grow significantly with the Chinese middle class's demand for cars that is already the largest market in the world.

(7) Furthermore, commercial trucking has to be close to the growing backbone of the Chinese economy.

(8) SORL has expanded its automative parts portfolio with the recent acquisition of an affiliated hydraulic brake, power steering and automative electrical parts operations.

(9) Some 36% of SORL's sales occur outside of China and they begun sales to India.

In short, the Chinese automotive industry appears to be a very good place to invest. SORL is at the intersection of that industry and others, so it appears to be particularly robust. SORL is purchasable below $9 now, while it can be expect to approach $10 with months.