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China's Small Caps Awake With A Fury

Published 05/06/2013, 01:19 PM
Updated 07/09/2023, 06:31 AM

After months in a deep freeze, Chinese small-cap stocks are showing major signs of life. These plays have surged dramatically, with many gains topping 10%.

Renren Inc. (RENN) $3.17, +0.38 (13.62%), E Commerce China Dangdang Inc. (ADR) (DANG) $4.17, +0.30 (7.75%), China New Borun Corp. (BORN) $1.50, +0.19 (14.50%).

Once Hated
For years, China's small caps have been hated due to the constant stream of fraudulent companies. Investors don't truly know if the Chinese company they are looking at has revenues and earnings as stated, or if it is all made up.

With the market trading at all-time highs, that seems to be a thought fading from view. Reality has little meaning when investors are running after yield and momentum. Now the search is on for anything that could advance and is still near lows. And for Chinese stocks, we're talking multi-year lows. Spec money is chasing anything that has a pulse and these are no different.
Renren, Inc.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com

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