Wonder Auto Technology Inc Com (NASDAQOTH:WATG)

CAPS Rating: 1 out of 5

Wonder Auto Technology engages in the design, development, manufacture, and sale of automotive electrical parts in China.


Player Avatar bofors (< 20) Submitted: 10/1/2010 10:36:41 PM : Outperform Start Price: $9.06 WATG Score: -176.44

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

(1) WATG appears maintained a floor at $7 since May and has otherwise clearly oscillated in the $7 to $9 range, maintaing an equilibrium about $8.

(2) WATG almost reached $16 a year ago and was above $12 last May.

(3) WATG broke out of its $9 ceiling in September.

(4) WATG's has a relatively low P/E ratio at about 11.

(5) WATG's revenue is growing at a rate of about 40% and income is growing at about 23%.

(6) WATG is part of the nascent Chinese automotive industry, which is expect to grow significantly with the Chinese middle class's demand for cars that is already the largest market in the world.

(7) WATG has expanded its automative parts portfolio significantly with the recent acquisition of a leading Chinese airbag and seatbelt maker.

(8) Some 11% of WATG's sales occur outside of China and they are growing at about 17% per year.

In short, the Chinese automotive industry appears to be a very good place to invest. WATG's is available well under $9, while it can be expect to approach $10 with months.

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