Top China Stocks To Buy Right Now in 2012

And real estate isn’t the only area that’s helping to support the Chinese economy. State-owned enterprises (SOEs) are benefiting from the Chinese government’s stimulus plan and banks’ increase in lending. Their strength is providing employment opportunities and is keeping money flowing into the Chinese economy. As a result, many of these SOEs have seen their share prices increase dramatically.

So outside of exports, the Chinese economy continues to exhibit robust growth with government-controlled and domestic consumption sectors showing strength and supporting the economy. And that’s why I continue to believe the Chinese economy will fully recover in the second half of this year and continue to provide us with incredible opportunities to profit from its strength. Here are my top China stocks to buy now.

Top China Stocks To Buy Right Now in 2012: KongZhong Corporation (KONG)

KongZhong Corporation, together with its subsidiaries, provides wireless interactive entertainment, media, and community services to mobile phone users in the People’s Republic of China. It also involves in the development, distribution, and marketing of consumer wireless value-added services, including wireless application protocol, multimedia messaging services, short messaging services, interactive voice response services, and color ring back tones. In addition, it offers interactive entertainment services, such as mobile games, pictures, karaoke, electronic books, mobile phone personalization features, entertainment news, chat, and message boards; and through Kong.net offer news, community services, games, and other interactive media and entertainment services; and sells advertising space in the form of text-link, banner, and button advertisements. Further, the company develops and publishes mobile games, including downloadable mobile games and online mobile games consisting of action, role-playing, and leisure games. As of December 31, 2009, it had a library of approximately 300 internally developed mobile games. Additionally, it develops online games; and provides consulting and technology services, as well as media and net book services. The company was formerly known as Communication Over The Air Inc. and changed its name to KongZhong Corporation in March 2004. KongZhong Corporation was founded in 2002 and is headquartered in Beijing, the People?s Republic of China.

Advisors’ Opinion:

• Louis Navellier2011-9-10Thanks largely to the country’s tremendous economic growth, there’s a new middle class in China. They have more leisure time than ever before, and that means big opportunity for entertainment provider KongZhong Corporation (KONG).The company provides wireless interactive entertainment, media and community services to mobile phone users, but it also offers interactive entertainment services, including mobile games, pictures, logos, karaoke, electronic books and mobile phone personalization features such as ring tones. The Chinese love their cell phones, and KongZhong provides much of the content that goes on those phones.Investors certainly haven’t been hesitant to dial up shares of KONG, as the stock is up over 218% in the last 12 months.I rate KONG an A, making it a strong buy.


• Wyatt Research Staff2011-8-30As a Chinese ADR, KONG is the leading provider of 2.5G wireless interactive entertainment, media and community services in terms of revenue to customers of company China Mobile. Institutions snatched up shares at an alarming rate with an increase of 26.7% in institutional ownership over the past three months.A consensus of analysts expect earnings to increase by 16.9% in 2011 and 19.6% in 2012. Company earnings are estimated to increase by 62.1% this year.
  
  

  Top China Stocks To Buy Right Now in 2012: eLong Inc. (LONG)

  
  

  eLong, Inc. operates as an online travel service provider in the People?s Republic of China. The company provides its customers with travel information and the ability to book rooms, air tickets, vacation packages, and other travel related services utilizing call center and Web-based distribution technologies. It facilitates the customers to book rooms in approximately 10,000 hotels in 450 cities across China, and fulfills air ticket reservations in approximately 80 cities across China. In addition, the company offers the ability to book rooms at approximately 100,000 hotels outside of China; and provides the customers informative content relevant to hotel and air travel decisions, including tourist and event site destination information, hotel facility information, and photos. eLong markets its services through online marketing, traditional media advertising, co-marketing with established brands of other companies, and direct marketing. The company was founded in 1999 and is headquartered in Beijing, the People?s Republic of China. eLong, Inc. operates as a subsidiary of Expedia Asia Pacific Limited.

  
  

  Advisors’ Opinion:

  
  


• cnAnalyst2011-9-10 eLong, Inc. (ADR) (NASDAQ:LONG) is the 10th best-performing stock last month in this segment of the market. It was up 62.09% for the past month. Its price percentage change was 17.47% year-to-date.

Top China Stocks To Buy Right Now in 2012: BioScrip Inc. (BIOS)

BioScrip, Inc. provides pharmacy and home health services in the United States. It operates in two segments, Infusion/Home Health Services and Pharmacy Services. The Infusion/Home Health Services segment engages in the intravenous administration of medications treating a range of acute and chronic conditions, such as infections, nutritional deficiencies, various immunologic and neurologic conditions, cancer, pain, and palliative care; and provides various types of home infusion therapies, such as parenteral nutrition, enteral nutrition, antimicrobial therapy, chemotherapy, immune globulin therapy, pain management, hemophilia, and respiratory therapy/home medical equipment. This segment also provides home healthcare services to adult and pediatric patients, including those suffering from chronic and acute illnesses, those in recovery from surgical procedures, and those who require monitoring or care for other reasons. Its services and programs include skilled nursing, wound care, oncology nursing and infusion nursing, rehabilitation, occupational therapy and speech language pathology, medical social services, and home health aide services, as well as private duty nursing care and intermittent nursing care. The Pharmacy Services segment owns and operates 34 specialty pharmacies. It provides traditional and specialty medications to treat people with various diseases and medical conditions, such as rheumatoid arthritis, Crohn?s disease, multiple sclerosis, psoriasis, immune mediated diseases, and HIV/AIDS, as well as hepatitis A, B, C, and related complications. This segment also offers specialty therapy management, prescription discount card programs, and pharmacy data services. As of March 31, 2011, BioScrip had 111 locations in 29 states and the District of Columbia, including 30 community pharmacy locations, 33 home nursing locations, 3 mail service facilities, and 45 home infusion locations. The company was founded in 1993 and is based in Elmsford, New York.

Advisors’ Opinion:

• Goodwin2011-9-11BioScrip, Inc. is a specialty pharmaceutical healthcare organization that partners with patients, physicians, healthcare payors and pharmaceutical manufacturers to provide access to medications and management solutions to optimize outcomes for chronic and other complex healthcare conditions. Its EPS forecast for the current year is 0.15 and next year is 0.45. According to consensus estimates, its topline is expected to grow 9.46% current year and 4.71% next year. It is trading at a forward P/E of 10.47. All four analysts covering the company are positive and have buy recommendations.


• cnAnalyst2011-9-10 BioScrip Inc. (NASDAQ:BIOS) is the 8th best-performing stock last month in this segment of the market. It was up 65.94% for the past month. Its price percentage change was 46.27% year-to-date.

Top China Stocks To Buy Right Now in 2012: China Mobile (Hong Kong) Ltd. (CHL)

China Mobile Limited, an investment holding company, provides mobile telecommunications and related services primarily in the Mainland China. It offers various services comprising local calls, domestic long distance calls, international long distance calls, domestic roaming, and international roaming. The company also provides voice value-added services, including caller identity display, caller restrictions, call waiting, call forwarding, call holding, voice mail, and conference calls; customer-to-customer messages and corporate short message services; and mobile Internet access services. In addition, it engages in other data businesses, which primarily include multimedia messaging services; color ring services that enable users to customize the answer ring tone from various selection of songs, melodies, sound effects, or voice recordings; and mobile reading, mobile gaming, mobile video, mobile payment/wallet, mobile TV, mobile market, and Internet data center services. Further, the company offers telecommunications network planning, design, and consulting services; roaming clearance services; technology platform development and maintenance services; and mobile data solutions, and system integration and development services, as well as operates a network and business coordination center. Additionally, China Mobile Limited sells mobile phone handsets and devices. As of March 31, 2011, it served approximately 600.8 million customers. The company was formerly known as China Mobile (Hong Kong) Limited and changed its name to China Mobile Limited in May 2006. China Mobile was founded in 1997. The company is based in Central, Hong Kong, and is considered a Red Chip company due to its listing on the Hong Kong Stock Exchange. China Mobile Limited is a subsidiary of China Mobile Hong Kong (BVI) Limited.

Advisors’ Opinion:

• Mark2011-11-8I’m living in China and I know what’s going on here.  I’ve been here for 9 years so I’d better.  A lot of companies are overpriced but China Mobile isn’t one of them.  They are going to be selling a lot 3G plans, which is very new in China, over the next several years.  The smart phone boom is going nuts here and China mobile is the leader in setting up these plans.  They aren’t cheap but the rising middle class can afford them.  I’m not Chinese but I’m going to get a good plan tomorrow.  I’ve checked into all the options and this is the best one.  Amazing pick that pays a solid 3.6% dividend.


• James K. Glassman2011-10-21Also impressive in 2010 was Matthews China Fund, the source of my New Oriental Education selection. As readers know, I am hugely enthusiastic about the stocks of what I call aspiring nations. Matthews has long-term expertise in China, with a knack for picking winners among firms focused on the domestic market, my favorite theme these days. Among the fund’s holdings, I especially like Lianhua Supermarket, China’s largest grocery retailer, but I can’t include it in my top ten because it doesn’t trade on a U.S. exchange. So I’ll go with the fund’s biggest holding, China Mobile ( CHL ), which owns about three-fourths of the market in a country of 1.3 billion, of whom only about half have a wireless phone. Thus, China Mobile has plenty of room to grow.


• Stephen2011-10-6China Mobile Limited provides telecommunications services in all 31 provinces across mainland China as well as some areas of Hong Kong. As of April 30, 2010, the Company’s total number of customers reached approximately 544.2 million. It offers GSM networks on division-synchronous code division multiple access (TD-SCDMA) standard as well as operates 3G network for smartphones & iPads. Although this company is headquartered in Hong Kong, you can buy shares on the New York Stock exchange as it trades as an American Depositary Receipt (ADR).The company’s stock is currently trading at 11 times earnings (p/e ratio) and sports a dividend yield of 3.86%. The company pays dividends twice a year and the payout ratio equals 40% which is really good. The company is sitting on 217 billion Chinese Yuan in Cash & Short Term investments which shows its strong cash flows & ability to pay a continued dividend. The stock has a $192 billion market capitalization making it among the top 100 largest listed companies in the world.
  
  

  Top China Stocks To Buy Right Now in 2012: E-House (China) Holdings Limited (EJ)

  
  

  E-House (China) Holdings Limited, through its subsidiaries, operates as a real estate services company in China. It provides primary real estate agency services, secondary real estate brokerage services, real estate information and consulting services, real estate advertising services, real estate online services, and real estate investment fund management services. The company offers primary real estate agency services to real estate developers of residential properties. Its secondary real estate brokerage services include offering advisory services on choices of properties; accompanying potential buyers on house viewing trips; drafting purchase contracts; negotiating price and other terms; and providing preliminary proof of title, as well as coordinating with the notary, the bank, and the title transfer agency. The company also provides market information to buyers and sellers based on its research, as well as listing and brokerage services comprising sales and rentals. Its real estate consulting services include land acquisition consulting and land development consulting. The company?s real estate information services comprise the sale of online subscriptions to its proprietary CRIC system to support its primary and secondary real estate agency services. Its real estate advertising services comprise advertising design and sales in print and other media. The company?s real estate online services include real estate news, information, property data, and access to online communities to real estate consumers and participants through local Web sites. Its real estate investment fund management activities consist of investments in China?s real estate sector. E-House (China) Holdings Limited was founded in 2000 and is headquartered in Shanghai, the People?s Republic of China.

  
  

  Advisors’ Opinion:

  
  


• Louis Navellier2011-9-10China’s massive citizenry has to be housed, and that’s the job of E-House (China) Holdings (EJ). The company provides primary real estate agency services, secondary real estate brokerage services and real estate consulting and information services.Its secondary real estate brokerage services include offering advisory services on choices of properties, accompanying potential buyers on house viewing trips, drafting purchase contracts and negotiating purchase prices and other terms. You might say that E-House (China) Holdings is the go-to real estate agent for the Chinese people.Hey, the housing boom may have fizzled out here in America, but in China housing is all the rage. And judging by the 134% gain in EJ shares over
  the past 12 months, investors certainly think this fire-breathing dragon is hot.I rate EJ an A, making it a strong buy.


• ChemTrade2011-8-28Founded in 2000, E-House (EJ) is a leading real estate service company in China. It has a large scope of services, good brand recognition and a strong geographic presence. The company provides primary real estate agency services, secondary real estate brokerage services as well as real estate consulting and information services.

The Most Profitable Companies Invest In America 2012

The Most Profitable Companies To Invest In NO.17: Citigroup (NYSE: C) – $10.6 Billion

For many years, Citigroup (NYSE: C) was the most profitable banking firm in the United States. But a series of foolish moves allowed  JPMorgan Chase (NYSE: JPM) and Wells Fargo (NYSE: WFC) to surpass them.

To get back to the head of the pack, Citigroup is repositioning itself as a key player in fast-growing emerging economies. Indeed, Citigroup now derives more than half its revenue from abroad.

Although the bank’s turnaround is not yet complete, the story should become a lot cleaner with each passing quarter, and eventually, investors should embrace the bank as a way to hedge against a falling dollar and as a way to have greater exposure to more dynamic economies elsewhere.

The Most Profitable Companies To Invest In NO.16: ConocoPhillips (NYSE: COP) – $11.4 Billion

Despite low profit margins, ConocoPhillips (NYSE: COP) has strengths in many areas: solid stock price performance, attractive valuation levels, robust revenue growth and compelling net income growth.

And if you think oil will continue to be expensive in the future, ConocoPhilips could be the ultimate value stock. The current dividend yield is 3.4% and management has a reputation for allocating capital to shareholders in the form of dividend increases and share buybacks — all good news for investors.

Photo courtesy of wikipedia.commons.org .

The Most Profitable Companies To Invest In NO.15: Intel (Nasdaq: INTC) – $11.5 Billion

If you own a smartphone, you are an indirect customer of  Intel (Nasdaq: INTC). Though they don’t manufacture or sell any smartphone components, Intel makes processors that help data center servers keep up with the demand, and the smartphone boom has been nothing but good for the company.

In addition to its profit-generating ability, Intel also has huge cash hoards. Using its cash to acquire fast-growing firms can be an effective way to boost its own growth, so look for Intel to get in on the market’s M&A activity in the coming months.

Photo courtesy of Flickr- Josh Bancroft .

The Most Profitable Companies Invest In NO.14: General Electric (NYSE: GE) – $11.6 Billion

It’s 2010 profit results are all well and good, but the historical numbers show that General Electric (NYSE: GE) has lost its way and needs a turnaround to return to the growth heyday it experienced while under the fearless leadership of Jack Welch.

GE Capital, GE’s massive finance arm, was a major profit driver under Welch, but it nearly ruined the company during the financial crisis. Back in 2007, GE Capital accounted for 55% of net income. That share fell to 13% in 2009.

Current CEO Jeffrey Immelt has a goal to limit GE Capital to no more than 40% of profits going forward, though it only recovered to 28% of profits in 2010, so it has some way to reach that level. GE will inevitably turn around its operations at some point, but there is no need for investors to wait for the company to find its way.

Photo courtesy of Flickr- Matt Millard .

The Most Profitable Companies Invest In NO.13: Coca-Cola (NYSE: KO) – $11.8 Billion

The world’s biggest soft drink maker, Coca-Cola (NYSE: KO), recently posted strong first quarter results, with a comparable net income of $6.4 million. With a powerful global distribution network, Coca-Cola products are currently sold in more than 200 countries and boast 500 different beverage brands. In the coming years, more than $20 billion will be spent to expand into emerging markets like Africa, Russia, Mexico and China.

Helping drive growth is the recent acquisition of Coca-Cola Enterprises, the company’s largest bottling unit in North America. It will now be cheaper for the company to produce and bottle smaller scale products — like the 100-calorie Coke can — to cater to calorie-conscious consumers.

Through the acquisition, Coke expects to improve business operations by better controlling product distribution so it can more quickly respond to changing market demand. As a result, Coke expects to save more than $350 million a year for the next four years. These savings should mean good news for shareholders.

Photo courtesy of Flickr: Kyle May .

The Most Profitable Companies Invest In NO.12: Wells Fargo (NYSE: WFC) – $12.4 Billion

One thing has been clear about Wells Fargo (NYSE: WFC) : the San Francisco-based bank seems to have adroitly sidestepped a great deal of the potholes besetting the banking sector the past few years. It hasn’t been immune to the powerful forces of a down economy, but at least its management hasn’t been pilloried by the press (like Bank of America (NYSE: BAC) and Goldman Sachs (NYSE: GS) ), and it didn’t make life-threatening bad investments that led to government handouts (like Citigroup).

Restrictions put in place when the TARP program was in effect have limited the annual dividend, but banking analysts think the payout ratio will eventually rebound to 30%, implying a $1.08 dividend based on 2012 profit forecasts. As the economy improves, the dividend could move even higher, creating the impetus for a dividend yield above 4% when measured against today’s stock price.

And it certainly doesn’t hurt to have Warren Buffett as your co-investor. Buffett’s continued bullishness on the bank should be heartening to even the most bank-ophobic investors.

Photo courtesy of Flickr — Neubie .

The Most Profitable Companies Invest In NO.11: Procter & Gamble (NYSE: PG) – $12.7 Billion

After selling Pringles, Procter & Gamble (NYSE: PG) is officially out of the foods game. They are currently taking active steps to distance themselves from competition by expanding their health care brands into overseas markets, mainly in China and India.

P&G is also taking advantage of the rise in e-commerce popularity, recently entering the e-commerce market with an e-store. This new strategy has seen significant penetration in North America and Asia, where they are able to extend their reach into under-served, emerging markets.

Photo courtesy of Flickr – Brandon C .

The Most Profitable Companies Invest In NO.10: Berkshire Hathaway (NYSE: BRK) – $13.0 Billion

Warren Buffett has relayed numerous times that future growth rates at Berkshire Hathaway (NYSE: BRK-A) will fall below historical growth trends, but he still thinks there is potential for investors to earn above-average returns by investing in the stock. Just take the past two years as an example — book value grew 19.8% in 2009 and 13% in 2010.

This suggests Berkshire is still able to compound wealth at a double-digit rate going forward. And regardless of growth rates, the company is so well-managed that it’s difficult to imagine it even being unable to generate large profits for shareholders.

Last year, Berkshire hired money manager Todd Combs to help reshape the company’s $63.2 billion equity portfolio. Combs didn’t wait long to make his first big move, as Berkshire recently reported a stake in MasterCard, Inc. (NYSE: MA) , valued at $54.4 million.

Photo courtesy of wikipedia.commons.org .

The Most Profitable Companies Invest In NO.9: Johnson & Johnson (NYSE: JNJ) – $13.3 Billion

Johnson & Johnson (NYSE: JNJ) has increased its dividends for the past 48 straight years, at an average rate of about 13.4% per year since 2000. If you purchased 200 shares of JNJ in 1980 (an investment of $14,600) and never added new money but just reinvested all the dividends, the position would be worth $1.15 million today. That’s a 7,868% return.

In other words, it’s like buying a house in 1980 for $146,000 that today is worth about $11.5 million. Home values didn’t appreciate anywhere near that much. That’s the power of growing dividends.

Photo courtesy of Flickr – aldinegirl87 .

The Most Profitable Companies Invest In NO.8: Apple (Nasdaq: AAPL) – $14.0 Billion

There is only one large U.S. corporation that can truly be called a growth stock: Apple (Nasdaq: AAPL) . The company’s performance was impressive enough that net income rose from $8.2 billion in 2009 to $14 billion in 2010.

What’s more impressive is the road ahead. Merrill Lynch predicts Apple will earn $34 billion by 2013, putting it at a close second behind ExxonMobil for the claim of America’s most profitable company.

Photo courtesy of Flickr — Bacr Aptemob .

The Most Profitable Companies Invest In NO.7: Int’l Business Machines (NYSE: IBM) – $14.8 Billion

Int’l Business Machines (NYSE: IBM) , affectionately referred to as Big Blue, is a titan in the technology industry. The company generated almost $100 billion in revenue last year and is about as diversified a technology company as can be found, spanning software, services, hardware and financing.

IBM’s presense abroad makes it fantastic play in a weak dollar environment — just over one-third of sales stem from the United States, with the rest being generated in Europe, Asia and the rest of the world.

Photo courtesy of Flickr — Patrick H~ .

The Most Profitable Companies Invest In NO.6: Wal-Mart Stores Inc. (NYSE: WMT) – $16.4 Billion

Despite falling same-store sales in the U.S. for two consecutive years, Wal-Mart (NYSE: WMT) posted a profit in both 2010 and Q1 of 2011. Their average U.S. shopper spent more per visit in Q1 of 2011, and their U.S. same-store sales of groceries and health and wellness items has increased for two consecutive quarters.

Wal-Mart’s domestic foot traffic is down, but international sales are soaring. Their profits have come largely from an 11.5% increase in international sales, offsetting the impact of the domestic slump with strong gains in all countries except Japan.

Wal-Mart is a well-run company that has historically provided long-term value to its stockholders, so don’t be discouraged by the domestic sales slump, they are still turning profits.

Photo courtesy of Flickr — Walmart Stores .

The Most Profitable Companies Invest In NO.5: JPMorgan Chase (NYSE: JPM) – $17.4 Billion

The entire banking sector is still wheezing back to life, so the next few years could represent a return to traditional banking profit margins. Notably, analysts’ forecasts anticipate subdued lending activity in 2011 and 2012 and, more than likely, bank profits will be meaningfully higher again in 2013 and beyond, granted the economy is truly healthy (and the housing market gets out of the sickbed).

Therefore, the opportunity to buy shares of banks like JP Morgan Chase (NYSE: JPM) while they trade for less than 10 times 2012 profits looks quite appealing. Trouble is, some investors are convinced that we haven’t seen the end of the mortgage crisis. So buying these bank stocks today certainly carries some short-term risk that more funds will need to be set aside to cover future liabilities.

Photo courtesy of David R. Tribble .

The Most Profitable Companies Invest In NO.4: Microsoft (Nasdaq: MSFT) – $18.8 Billion

There are some who believe that Microsoft’s (Nasdaq: MSFT) best years are behind it and the company is riding into the sunset. While Microsoft is no longer synonomous with tech’s tomorrow (see Google, Facebook and Apple), there is no denying that company is still a cash cow.

Microsoft just announced its acquisition of Skype in a deal valued at $8.5 billion. Microsoft plans on intregrating its technology with the XBox console, Kinect device and its Windows Phone platform. This may be the deal that yields the strategic benefits Microsoft needs to stop following the leaders in the industry, and start leading again.

Photo courtesy of Flickr — Robert Scoble .

The Most Profitable Companies Invest In NO.3: Chevron (NYSE: CVX) – $19.0 Billion

Chevron (NYSE: CVK) is a top-five oil firm, given its vast reserves of oil and natural gas. Growth during the past decade has been stellar, as sales have improved 15.5% and earnings by 17.5% on average each year in the past decade. Growth is projected to continue apace, with the earnings consensus for this year at $12.12 a share, or nearly 30% above last year’s levels.

At the current price, Chevron offers the solid combination of a low earnings multiple, a decent dividend yield of 2.7% and strong projected growth. And nearly 60% of last year’s stales stemmed from overseas, giving the company exposure to faster-growing regions outside of the United States.

Photo courtesy of Flickr — Jonathan McIntosh .

The Most Profitable Companies Invest In NO.2: AT&T (NYSE: T) – $19.9 Billion

AT&T (NYSE: T) posted a $19.9 billion 2010 net income, and $1 billion of that money is being invested in the cloud computing business in 2011. This will help AT&T achieve tremendous efficiencies and flexibility in cloud-based environments in order to provide applications for any type of device.

AT&T also just acquired T-Mobile for $39 billion, which helps the company vastly expand its broadband network and possibly position itself as market leader in the U.S. wireless industry.

Photo courtesy of Flickr — Chris Young .

The Most Profitable Companies Invest In NO.1: Exxon Mobil (NYSE: XOM) – $30.5 Billion

There’s no debate over how  Exxon Mobil (NYSE: XOM) will use its prodigious profits. The energy giant has spent eight years buying back stock, and there’s no indication that it will stop now. Exxon Mobil has bought back two billion shares since 2002, leading to a 29% reduction in its share count.

Assuming Exxon Mobil will once again focus on stock buybacks, the share count may drop from the current 4.8 billion to just four billion by the middle of 2013. For a company with $30 billion in annual income, the shrinking share count could mean record profits per share.

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Best Stocks to Buy

Top 5 Stocks Under $5 That Insiders Love to Invest in 2012

Penny stocks have a solid reputation for being a risky investment; however, if the potential rewards excite you, then the list below might provide an interesting starting point for your search.

To create the following list, we took a universe of penny stocks (priced under $5 per share) and searched for names with a market cap over $300 million experiencing significant levels of insider buying over the past six months.

Here are some of the things we looked at when compiling the list of penny stocks:

Top 5 Stocks Under $5 That Insiders Love to Invest in 2012 – Market Capitalization (Market Cap) : Market capitalization, commonly referred to as market cap, is the total market value of a company’s outstanding shares. It can be thought of as a measure of a company’s size. Market cap can be calculated by multiplying the number of shares by the current price of the shares. Companies with higher market cap are considered to have more trustworthy information because they have greater histories of profitability and data.

Top 5 Stocks Under $5 That Insiders Love to Invest in 2012 – Insider Trading: Many analysts follow insider buying trends because, after all, insiders know more about their companies than anyone else. Their investment activity is closely monitored and can tell us a lot about where they feel the business is heading. Insider buying is represented as a percentage of the share float. Companies experiencing insider buying over the past six months provide an indicator that insiders think the stock is undervalued at current levels. Inversely, insider selling serves as a negative indicator.

Now that you’re armed with information, take a look at the following list of penny stocks that insiders seem to think are good values. Use this list as a starting point for your own analysis, and always keep in mind that a low share price does not mean low risk. Companies below $5 are there for a reason. Use caution and stop losses at all times.

Top 5 Stocks Under $5 That Insiders Love to Invest in 2012 – Opko Health, Inc. (AMEX:OPK) is in the medical appliances and equipment industry and has a market cap of $1.16 billion. Net insider shares purchased over the current quarter comes in at 6.85 million, which is 5.03% of the company’s 136.31 million-share float.

The stock is a short squeeze candidate, with a short float at 9.47% (equivalent to 10.83 days of average volume). The stock has had a couple of great days, gaining 10.74% over the last week.

Top 5 Stocks Under $5 That Insiders Love to Invest in 2012 – MannKind Corp. (NASDAQ:MNKD) is in the biotechnology industry with a market cap of $335.28 million. Net insider shares purchased over the current quarter comes in at 3.48 million, which is 4.39% of the company’s 79.29 million-share float.

The stock is a short squeeze candidate, with a short float at 28.55% (equivalent to 25.89 days of average volume). The stock has had a couple of great days, gaining 6.67% over the last week.