Shanghai Shuixing Home Textile Co., Ltd. (SHSE:603365) shares have continued their recent momentum with a 30% gain in the last month alone. Looking further back, the 25% rise over the last twelve months isn’t too bad notwithstanding the strength over the last 30 days.
Even after such a large jump in price, Shanghai Shuixing Home Textile may still be sending very bullish signals at the moment with its price-to-earnings (or “P/E”) ratio of 14.1x, since almost half of all companies in China have P/E ratios greater than 38x and even P/E’s higher than 75x are not unusual. Although, it’s not wise to just take the P/E at face value as there may be an explanation why it’s so limited.
Shanghai Shuixing Home Textile has been struggling lately as its earnings have declined faster than most other companies. The P/E is probably low because investors think this poor earnings performance isn’t going to improve at all. If you still…
