"The hands-down choice for growth in the insurance sector is in China, where the industry is just getting off the ground." says growth stock expert Timothy Lutts.

In The Cabot Stock of the Month Report, he notes, "Cninsure (NASDAQ: CISG) is the king of the sector. We believe the stock is the most attractive investment in China's insurance industry today."

"When properly managed, a property and casualty insurance company is an excellent vehicle for participating in a region’s growth.

"However, the average age of top insurance companies in the U.S. is 108 years and their assets of the U.S. are growing slowly.

"For real growth opportunities in the insurance business, you need to go to countries with better growth prospects … and with younger and smaller insurance companies. In China, the industry is just getting off the ground.

"Reason one for this is the simple fact that Chinese people have substantially more stuff worth insuring each year. Reason two is a growing shift in cultural norms (toward more American standards) that rewards the accumulation and protection of wealth.

"Cninsure was founded in 1999 as an automobile insurer—it added property and casualty insurance in 2002 and life insurance in 2006—and its revenues have grown every year.

"Last year they mushroomed 105%, from $60 million to $123 million. No doubt growth will slow in the years ahead as the company gets larger, but we still that growth of 25% or more may be a conservative projection.

"The lion’s share of the company’s growth has come from acquisitions (more than 30 over the past three years), and we expect that pattern to continue.

"CISG came public in October 2007, an absolutely horrible time, market-wise. It traded as high as 26 on its first day, and it hasn’t been back since. The bear market low was 5, and since May CISG has been beating the market on the upside, climbing back toward its old high.

"CNinsure is not a classic undervalued stock; it’s too fast-growing to be that. But the growth prospects appear to more than justify the current P/E ratio, and that makes it a value stock.

"The biggest potential problem, in our opinion, is the market. It’s ripe for a cooling-off period, and there’s no guarantee that CISG would be immune to a widespread retreat.

"So our advice is this: buy a little now, ideally around 21, where we see the uptrending 50-day moving average. And then wait. If the stock breaks out convincingly above 24, you can buy more."