China Natural Gas (CHNG) Continues to Move Higher

• Ian Wyatt
• On 5:15 pm EDT, Monday October 12, 2009

Despite the fears that China has a serious lending bubble exaggerating growth and threatening its economy, Chinese stocks continue to be attractive. On Friday, we noticed another set of Chinese stocks making the Top Daily Gainers list. And I introduced you to one of my favorite Chinese stocks, China Natural Gas (NasdaqGM:CHNG - News).

I recommended China Natural Gas to my SmallCapInvestor PRO advisory service members at $6.14 a share. It closed Friday at $13.70, a 10% one-day gain. Today, it made another nice 16% gain to the $14.50 range. I think $18 is in the cards for this stock. (Click HERE for my initial report on China Natural Gas.)

We also took a look at a Chinese fertilizer stock from Friday's Top Daily Gainers list, China Agritech (NasdaqGM:CAGC - News). It was up 13%. Unfortunately, it gave back $2.20 or 10% today. Meanwhile, the Chinese fertilizer company I've recommended to SmallCapInvestor PRO members managed a slight gain today. Just sayin'.

On September 28, we had a look at India Globalization Capital (AMEX:IGC - News) after a 17% jump. It was back on the Top Daily Gainers list today with 16% move higher. It closed at $1.98, up 6% from our first look.

RAM Energy Resources (NasdaqGM:RAME - News) was back with a 13% move higher. We continue to see nice moves from energy sector stocks, and so these remain good investment choices. We first identified RAM Energy on October 1 at a closing price of $1.61. Today's close at $1.86 is a 15% gain.

And speaking of energy, solar company Energy Conversion Devices (NasdaqGS:ENER - News) mad a nice 15% move today. This is interesting because the fundamentals for solar stocks have been pretty bad for the last year, even though solar energy is one of the most economical alternative energy sources.

I don't see many other big gains from solar stocks today, and there's no news for Energy Conversion Devices. Still, let's put solar stocks on our radar and see if we see a sector trend building here.

On October 5, we looked at Trident Microsystems (NasdaqGS:TRID - News) after a 15% gain to $2.68. Trident makes integrated circuits for digital and LCD televisions. Today, it was up 6% to $3, an 11% gain. Trident reports earnings on Monday, October 26.

One stock from today's Top Daily Gainers list that stands out to me is Allied Defense Group (AMEX:ADG - News). The company makes and sells ammunition. There's no news on the company today, but the valuation on the stock is compelling. It has a $50 million market cap and trailing 12-month revenues of $156 million. Year over year revenue growth is 17% and gross profit is $20.

The company is losing money -- $7 million last quarter. But it is cash flow positive. And it is appears poised to reverse its losing ways. The one analyst covering the stock expects a $0.21 a share profit for this fiscal year and a $0.77 profit for next year.

That's a pretty healthy jump and I'd expect the stock to move higher as the company turns the corner back to profitability. Could it be a $20-$25 stock like it was back in 2005-06? That might take a while. But $10 over the next 6-12 months might be doable.

What do you think of my reads on the top gainers? Are you holding or even looking at any of these stocks? Leave a comment.

Buzz up!