It is not every day that a Chinese financial services company links arms with the global news business Dow Jones. So it should come as no surprise that as China Finance Online (NASDAQ: JRJC) secures a partnership with Dow Jones, the bulls instantly rally behind. JRJC is already up 170% in pre-market trading. The rise is great for existing shareholders. However, the question remains, have all the gains been made or is there still room to grow? In saying that, this article will provide our readers with an objective breakdown of the partnership and the possible strategies to consider.

Table of contents 
1. Dow Jones partnerships sends JRJC surging 170%
2. What does China Finance Online's future look like? 
3. Possible investment strategies to consider.

 

JRJC Dow Jones agreement sends stock surging 150%

Today JRJC announced it signed a partnership agreement with Dow Jones. The agreement provides JRJC access to the Dow Jones Chinese language newswire service. Ultimately, allowing China Finance Online to provide market commentary and spot news for the Chinese Investing community. However, the benefits of the agreement do not stop here. Both companies will combine their resources, namely Dow Jones’ global economic data and China’s domestic-market leading data, to bring quality, professional information to business audiences. Thus, JRJC, Dow Jones, and investors worldwide all benefit from the partnership.

The agreement is a milestone. Especially as CEO of China Finance Online, Zhiwei Zhao commented, “this marks a significant partnership as well as a strong endorsement of our philosophy that data-driven knowledge will enable investors success.” In the mind of investors this partnership elevates the status of JRJC in China and Globally. Reputation is everything in the information age. Because if your business can be at the end of  the question, where do you get your financial information from?, then you have a clear market advantage. Overall, the partnership bolstered JRJC’s market image and future revenue, causing the bulls to trigger a 155% increase. (At the time of writing.

Is the Dow Jones partnership just the beginning?

The short answer is yes (opinion not advice). JRJC, through the Dow Jones partnership, have catapulted themselves into the upper tier of financial news. Because within Dow Jones is The Wall Street Journal, Barron’s, Market Watch, and Factiva. The connection to these brands alone will see China Finance Online into a new age. To use the words of Christopher Ellis, Asian Pacific partnership executive at Dow Jones, “This new partnership with China Finance Online marks an exciting new chapter for our business in Asia”. Overall, the likelihood of JRJC landing more financial news partnerships in the years to come is now high – the snowball effect (opinion not advice)

 

Here is what you need to know about possible JRJC investments

Before I begin I am obliged to remind our readers that this is not financial advice but rather my commentary on my extensive research in this area

Does riding the wave hold any potential?

JRJC’s pre-market activity is extremely bullish, making many investors tempted to jump on the moving train. However, YIG would like to point out that pre-market trading is very much a dangerous illusion. The current perception is that JRJC will continue to rise forever, luring many investors to jump on the buy order at the bell. However, at the bell is when volatility is most high. So yes, entering at open could provide some short term gains. (Opinion not advice) However, the music could stop right after the bell, resulting in instant losses. It would be smart to track the pre-market data until the bell and see if there is  a slowing in the growth or an acceleration.

Taking a long-term approach

To reap the rewards of a long-term JRJC investment your entry must be impeccable. Because snapping up shares at a discount is a key part of the strategy. In the case of JRJC simply investing at the bell and leaving it for the long might provide you with a potential gain but there could be smarter ways to play it. Waiting for the pullback is long-term investors best bet (opinion not advice). Because ‘All good things come to an end’, well at least temporary. The euphoria surrounding JRJC should subside once institutions or sellers begin to start taking profits. Providing investors with an opportunity to ride the long-term wave as the value of the JRJC should see the share price rise over the time horizon (opinion not advice).

 

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The information above should not be taken as financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you. 

Written by Patrick McLoughlin, Senior Manager of YIG.

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