Until recently, many Chinese turned to manufactures, retailers and government agencies to meet their every day needs. But in recent years, they have become distrustful. One recent example: The sale of tainted milk powder that killed several, babies in 2008 and sickened more than 300,000 others, many with kidney stones or kidney failure. Turns out that city officials in the company's hometown in China knew about the problem, but they continued to sell the baby formula.

Such episodes have led many Chinese families to now turn to China Nepstar Chain Drugstore (NPD), China's largest retail drugstore chain. The company has become a trusted site in many urban neighborhoods much the way Americans trust the products they buy at stores such as Walgreens (WAG) and CVS (CVS).

Plus, the company is moving into a growth business: filling prescriptions. Until recently, most Chinese would fill their prescriptions at the hospital. But that is quickly changing.

As a result, the chain, has now grown from a single shop in 1995 to about 3,000 outlets across China. Yet while it's the largest drugstore chain in China, it still only has a 2% share of the market. Which means lots of growth ahead. While there is competition, it still has greater bargaining power with the pharmaceutical manufacturers and distributors than the smaller fragmented mom and pop operators.



Hilary Kramer, editor of GameChangerStocks.com, says that Nepstar is a buy for those reasons. She also likes the company's owners, Neptunus Group and has had her eye on the stock for some time. The stock has fallen about 59% since the beginning of the year, due to rising wage and rent expenses, but the company now has a new CEO and is taking steps to put cost controls underway.

Along with the growth opportunities, the new CEO and control on costs, Kramer also says that the company recently declared a buyback, and is repurchasing up to $20 million worth of its shares over the next 12 months which will give support to the stock. In addition, the NYSE traded shares sport a 9% dividend yield.

Kramer's six month target: $3.50 per share, an increase of about 12%.

Increase your money and finance knowledge from home

Managing your Portfolio

Keeping your portfolio and financial life fit!

View Course »

Professional Vs Do it Yourself Investing

Should you get advice or DYI?

View Course »

Add a Comment

*0 / 3000 Character Maximum

6 Comments

Filter by:
dhggifg

http://www.wowougg.com Air jordan(1-24)shoes $33 BOOT $50 Nike shox(R4,NZ,OZ,TL1,TL2,TL3) $35 Handbags(Coach lv fendi d&g) $35 Tshirts (Polo ,ed hardy,lacoste) $16 Jean(True Religion,ed hardy,coogi) $30 Sunglasses(Oakey,coach,gucci,Armaini) $16 New era cap $15 Bikini (Ed hardy,polo) $25 FREE sHIPPING http://www.wowougg.com ...... , . - . - , _ , ......... ......... ) ` - . .> ' `( ....... ........ / . . . .`\ . . \ ........ ........ |. . . . . |. . .| ........ ......... \ . . . ./ . ./ .......... ........... `=)\ /.=` .......... ............. `-;`.-' ............. ............... `)| ... , ......... ................ || _.-'| ......... ............. ,_|| \_,/ .......... ....... , ..... \|| .' ............. ....... |\ |\ ,. ||/ .............. .... ,..\` | /|.,|Y\, ............ ..... '-...'-._..\||/ ............. ......... >_.-`Y| ............... 2@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@2@

September 28 2010 at 10:00 AM Report abuse rate up rate down Reply
dhggifg

http://www.wowougg.com Air jordan(1-24)shoes $33 BOOT $50 Nike shox(R4,NZ,OZ,TL1,TL2,TL3) $35 Handbags(Coach lv fendi d&g) $35 Tshirts (Polo ,ed hardy,lacoste) $16 Jean(True Religion,ed hardy,coogi) $30 Sunglasses(Oakey,coach,gucci,Armaini) $16 New era cap $15 Bikini (Ed hardy,polo) $25 FREE sHIPPING http://www.wowougg.com ...... , . - . - , _ , ......... ......... ) ` - . .> ' `( ....... ........ / . . . .`\ . . \ ........ ........ |. . . . . |. . .| ........ ......... \ . . . ./ . ./ .......... ........... `=)\ /.=` .......... ............. `-;`.-' ............. ............... `)| ... , ......... ................ || _.-'| ......... ............. ,_|| \_,/ .......... ....... , ..... \|| .' ............. ....... |\ |\ ,. ||/ .............. .... ,..\` | /|.,|Y\, ............ ..... '-...'-._..\||/ ............. ......... >_.-`Y| ............... 2@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@2@

September 28 2010 at 10:00 AM Report abuse rate up rate down Reply
frankengreat

Not to worry. Chinese Lead will cure anything. As for markets being manipulated, all markets are manipulated by buyers and sellers.

September 27 2010 at 7:38 PM Report abuse rate up rate down Reply
punnster

Considering China's quality control,I would not buy any of their medicines.

September 27 2010 at 3:35 AM Report abuse rate up rate down Reply
kv37

You do realize that Chinese stocks are controlled by communists. And they do whatever they want.

September 26 2010 at 8:14 AM Report abuse -1 rate up rate down Reply
1 reply to kv37's comment
Robert & Lisa

The fix is in. The markets are being manipulated by the ultra rich and powerful. Stay out. If you can't invest in your own business, diversify into precious metals and maybe real estate.

September 26 2010 at 7:18 AM Report abuse rate up rate down Reply