How long will it be before China Precision Steel, Inc. (NASDAQ: CPSL) starts its rally up?

China Precision Steel, Inc. (NASDAQ: CPSL) stock gained 9% over June 13, 2008. This is very interesting as the company's share price movement is amazingly desultory. It may seem investors cannot decide if the company is going up or down. Let's get some insight on that.

According to their latest earnings announcement , the company is in a very strong position for growth. Their revenue for the third fiscal quarter of fiscal 2008 has increased to $18.7 million which was more than a 61% increase, compared to the same period a year ago. The result was a 231% increase in net income which ended up at $4.6 million.

This is not the only quarter that the company has shown improvement in finances. Actually, a stable and forward headed growth can be seen over the whole last year if you compare quarters on a year-to-year basis, thus avoiding misinterpretations due to seasonality.

Moreover, the steel and iron industry in which China Precision operates, has been steadily growing since January 2008. Being a China company Precision Steel can also benefit from one of the fastest growing economies in the world. More to it, the company is engaged in the processing of ultra-thin cold-rolled precision steel; high-carbon, high strength cold-rolled steel; and low carbon super-thin cold-rolled steel. None its products are in direct competition with the largest steelmakers of China, letting the company progress in their niche more easily.

China Precision had over $14 million in cash as of March 31, 2008. Considering that the company operates profitably, these funds can, and most probably will, be put into further expansion. So here we have a producing company that is generating profit, has increasing profits and has money for further expansion. One could say that the company is already trading at the price levels it should trade at the moment, and that person might be correct. However the constant improvement in China Precision's performance should eventually drive the company's value up and thus increase the share price. The stock's bumpy ride should be coming to an end soon giving way for a more stable uptrend.