Home Inns & Hotels Management (HMIN)

This Chinese budget hotel is hot stuff. Explosive growth is in the works – HMIN is expanding like crazy and will get a big boost from the 2008 Olympics. The problem is, HMIN is too expensive to consider buying at this point. Although there is nothing wrong with paying a premium for growth, there is a problem if that premium is ridiculous. 160 trailing P/E and 60 forward P/E is just too much. I am not at all surprised by HMIN's recent drop from 35 to 32 - it would probably be a safe bet to pick it up around 28.