Profile: China Ritar Power Corp. (Ritar), is a manufacturer of lead-acid batteries in China. Through its Chinese subsidiaries, the Company designs, develops, manufactures and sells environmentally friendly lead-acid batteries with a range of applications and capacities, including telecommunications, uninterrupted powers source devices, light electric vehicles and alternative energy production (solar and wind power).
Market Cap: 108$M
Website: http://www.ritarpower.com/
Trading Thesis:
Mid term play, based on TA and FA.
Current estimates:
(http://www.clubeinvest.com/forumbolsa/index.php?action=dlattach;attach=19047;image)
The stock trades at 8.2X FY10 earnings while the sector trades near 30X, these estimates were posted by a poll of only 2 research departments and their average price target is 9$ FY10.
(http://www.clubeinvest.com/forumbolsa/index.php?action=dlattach;attach=19048;image)
Given the first 2 quarters of 2009 the current FY09 estimates may look a bit extended, but taking a look on quarter by quarter data we can see that 3Q is always the strongest:
(http://www.clubeinvest.com/forumbolsa/index.php?action=dlattach;attach=19049;image)
The chart looks awesome, with a solid mid-term bullish trend and a well defined resistance near $6.35:
(http://www.clubeinvest.com/forumbolsa/index.php?action=dlattach;attach=19044;image)
I'm expecting a few days of consolidation followed by a breakout with an extended move up to $8.50 before 3Q is posted.
Trading Plan:
Buy for both portfolios below 5.70$, stop @ 4.80 and limit sell @ 8.30
Trading Thesis:
- Same good set of fundamentals since a few months ago, but trading 40% below.
- I believe $4 is a support and I want to give another shot at this stock.
- I expect a rebound at least to the recent high above $6.50
- Nice risk/reward ratio at these levels.
Trading Plan:
Buy for both portfolios at the open, stop @ 3.30 and limit sell @ 6.45