17 December 2009; market closed (The previous issue was broadcast on 12/10/09)
Preemptive Profit-Positioning:
Jinpan International Ltd. (JST Nasdaq): $44.00 X $44.10
On 15 September 2009, I announced a preemptive buy-signal on Jinpan International (JST) at the $27.60 per share level. JST has moved steadily higher since our September buy-signal and is now trading approximately 59% above our stated entry-price based on today’s close of $44.00 per share.
China-based Jinpan International (JST) is a leading designer, manufacturer, and distributor of cast resin transformers for high voltage distribution equipment. The company’s transformers allow high voltage transmissions of electricity to be distributed to various locations at lower, more usable voltage levels.
We see Jinpan moving higher still in 2010 with its huge exposure to China’s surging industrial growth. Infrastructure products like Jinpan’s should continue to be in high demand as China’s gross domestic product growth holds in the double digits. Right now, Jinpan reaps nearly 90% of its revenue from Chinese sales. Yet, beyond JST’s powerful growth prospects in China, the company is also well-positioned for revenue expansion in North America and other parts of the industrialized world as large companies seek to become greener. Jinpan’s transformers, by design, are much cleaner and less hazardous to the environment than oil-filled transformers, which is what the bulk of the competition currently uses.
Maintain open JST positions for longer-term projected gains above $50 per share by mid-point of 2010. There is no protective sell-stop in place on this trade.
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