It's been an incredible earnings season so far. Due to better-than-expected results, the global stock markets experienced one of the best Julys on record. In fact, the Dow Jones rallied 8.6%, while the S&P 500 gained 7.4% during July.
But there's no denying that China stepped into the spotlight last month and this earnings season. Many of the U.S.-based companies reporting solid results in the second quarter focused a good portion of their business in China, including Caterpillar, Alcoa and Intel. Thanks to the Chinese government's $586 billion stimulus plan, China's demand for construction equipment, metals like steel and computers remained robust -- and that kept business booming at companies supplying these products to China.
In addition, Chinese companies experienced a fantastic quarter, also due to China's strong economic growth and stimulus plan. As a result, China's A-Share stock market in Shanghai jumped 15% during July as Chinese companies reported blowout earnings.
And because of the strength of China's economy and stock markets, I've been advising you for weeks to focus your investments on Chinese companies. In fact, earnings season has presented us with an incredible opportunity to snatch up shares in select Chinese companies and lock in a quick 5% to 10% profit in a matter of days.
To review, just take a look at recent earnings reports from three of my China Strategy recommendations…
1) China's leading education services company: As we discussed last week, this company saw its revenues increase 47.9% and income jump nearly 50% in the second quarter due to rising student enrollment at its schools. Enrollment jumped 8.2%, or 30,200 students, and now, the company has around 1.5 million students enrolled in its schools, representing an increase of nearly 20%. Even better: The company expects to grow between 24% and 29% this year. Following the positive earnings report, shares have rallied 14% in the past two weeks.
2) The Google of China: At the same time, this company also reported a solid second quarter. If you recall from last week's discussion, the company's revenues jumped 37%, while income increased nearly 45% -- all thanks to an increase in retail spending from China's stimulus plan. And shares jumped 9% in the past two weeks, bringing the company's year-to-date gain to a whopping 172%!
3) A leading domestic water treatment equipment supplier in China: Yesterday, this company reported solid earnings in its first quarter reporting as a public company -- its IPO was in June. Revenue jumped 32.4%, while income increased nearly 50%. The solid results were due to growth in all three of the companies' product categories, thanks to government mandates for water treatment products and stricter environmental protection laws. Due to the robust results, shares have jumped 5% on the news today!
Considering these positive earnings reports and subsequent bounces in the companies' shares, I hope you've taken my advice over the past couple weeks. By joining China Strategy, you would have locked in 5% to 10% gains in some of my top recommendations in a matter of days. If not, don't despair -- it's not too late!
Over the next couple of weeks, six more of my China Strategy recommendations will be reporting earnings results. And now is your chance to dive in, get your feet wet and be prepared for a nice 5% to 10% profit in just a few days. After that, the sky's the limit, as China's economic recovery and massive stimulus package continue to drive these companies' shares higher.
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