5-Star Stocks Poised to Pop: Guangshen Railway

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Chinese railroad operator Guangshen Railway (NYS: GSH) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Guangshen's business and see what CAPS investors are saying about the stock right now.

Guangshen facts

Headquarters (Founded)Shenzhen, China (1996)
Market Cap$3.5 billion
IndustryRailroads
Trailing-12-Month Revenue$2.2 billion
Management

CEO Shen Yi (since 2008)

Chief Accountant Tang Xiangdong (since 2008)

Return on Equity (Average, Past 3 Years)6.3%
Cash/Debt$685.2 million / $544.7 million
Dividend Yield4%

 

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 97% of the 770 members who have rated Guangshen believe the stock will outperform the S&P 500 going forward. These bulls include Frycup and All-Star rd80, who is ranked in the top 1% of our community.

Just last month, Frycup listed several of Guangshen's positives: "China, Chinese consumer growth, hard assets, value play. All beautiful things."

In fact, Guangshen currently trades at a paltry price-to-cash flow of 4.5. That represents a clear discount to North American counterparts Canadian National Railway (NYS: CNI) (11.1), CSX (NYS: CSX) (6.8), and Union Pacific (NYS: UNP) (8.7).

CAPS All-Star rd80 lists several reasons to climb aboard Guangshen:

1. Very reasonable valuation.
2. Trains are cool.
3. Decent dividend.
4. Yuan is likely to get stronger vs. the dollar.
5. Growing economies need to move stuff. Rail is the most efficient way to do that over land.
6. I don't have any Chinese stock picks yet. Might as well start with a 5-star.

What do you think about Guangshen, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Interested in another easy way to trackGuangshen?Add it to your watchlist.

At the time this article was published We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Fool'sdisclosure policyalways gets a perfect score.

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