CVVT, BSPM, CNIT: Stocks to Buy in Current Selloff

China Valves Technology (NASDAQ: CVVT), Biostar Pharmaceuticals (NASDAQ: BSPM) and China Information Technology (NASDAQ: CNIT) are some stocks that can be and should be added to one’s equity portfolio. It may appear too much of a stretch to talk about positive returns when the markets are trading with deep cuts but as every correction brings some opportunities, there are good stocks going for a song in the current selloff also. Incidentally, all these stocks are from China.   

China Valves Technology (NASDAQ: CVVT) is down 6 per cent today when the indices are also down close to 2 per cent. The stock has come down heavily from the levels of $12 seen in November last year to $2.8 now. The correction seems to be overdone as the stock trades at a P/E multiple of just 2.4 and it is not a case of falling profitability. Forward P/E multiple works out to about 2.3 so the business is profitable next year too. In addition, the stock of this valve manufacturer currently trades at around 40 per cent discount to its book value per share of $5.77. As and when China’s growth engines fire again, CVVT will be a beneficiary. After all, it is not too long ago that the stock traded above $10.  

Biostar Pharmaceuticals (NASDAQ: BSPM) has a 52 week high of $3.51 and low of $1.02. The stock currently trades at $1.08, down 8 per cent in line with broader markets. Current market price isn’t very far from the yearly low but that doesn’t make it a pick in these testing times. This biotech company has a book value of $2.33 per share which is a steep discount to its net asset price. Besides, BSPM trades at a P/E multiple of just 1.82. Like CVVT, BSPM has also come off significantly from its November highs and currently trades at attractive valuations. Looking at current prices, the downside is pretty much limited while the upside is very prominent.

Shenzhen based information technology player China Information Technology (NASDAQ: CNIT) is also trading down more than 6 per cent in morning trade. After the 8 per cent drop in the last week, the stock trades at a P/E multiple of 2.91. Being an information technology player, book value isn’t a great indicator of company’s value. However, the business is likely to do good next year too with increased earnings. The stock has a forward P/E multiple of 2.2 making it even more attractivE.

Author : Brian Presscott
Sources : smallcapnetwork.com