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Zacks Market Edge Highlights: Baidu, Alibaba, JD.com, Tencent and Sina
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For Immediate Release
Chicago, IL – Oct 26, 2017 – Zacks Market Edge is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here: (https://www.zacks.com/stock/news/280012/should-investors-buy-chinas-fang-stocks)
Should Investors Buy China’s FANG Stocks?
Welcome to Episode #104 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
In this episode, Tracey is joined by Zacks Editor Ryan McQueeney to discuss China and its Internet and social media stocks.
It’s no secret that Tracey has not been a big fan of investing in Chinese stocks over the last several years. She was among those burned by the Chinese scam companies about 6 years ago with companies that, it turned out, didn’t really exist.
But last week, she bought her first Chinese stock in her own personal portfolio in 6 years.
Making the Case for China
1. The Chinese economy has been weaker than the official economic data has indicated. While technically not in a recession, for an economy used to hyper-growth, it sure looked like one. But it appears like the Chinese economy may be coming out of that slow period.
2. The Chinese government has picked its winners in every industry and sector, including the Internet and social media stocks. These “winners” have the full backing of the government, which allows them to dominate the huge Chinese market.
3. Transparency appears to be better among these huge companies versus the smaller Chinese companies that went public just a decade ago. After all, Alibaba was the largest IPO of all time.
For investors who already own the American social media companies, why not add in the world’s most populous country and buy the Chinese equivalent?
China’s FANG Stocks
1. Baidu (BIDU - Free Report) is the Google of China. It gets ignored by investors but sales are expected to be up double digits this year and next and it trades with a forward P/E of just 35.
2. Alibaba (BABA - Free Report) needs no introduction. But it’s also not a pure online shopping platform as it also owns video platform Youku, which it bought in 2015 for $4 billion, as well as Alipay. It also has made a push into expansion outside of its Chinese home market, specifically into India and Southeast Asia.
3. JD.com (JD - Free Report) is the lesser known of China’s online shopping sites. Shares aren’t cheap, as they’re trading at 86x forward earnings but you should see sales growth over 25% this year and next.
4. Tencent (TCEHY - Free Report) owns the Facebook of China, which is called WeChat. As of the second quarter, the company was approaching nearly a billion users on that platform. It is also big in smart phone gaming as well as other hot areas like video and AI research.
5. Sina Corporation is the smallest of these companies with a market cap of just 7.6 billion. It’s an online media company which is the parent of Weibo. Weibo is the Twitter of China. In the second quarter, gross margins were 74%. It saw strong advertising demand on the Weibo platform.
As Tracey can attest to, there are certain risks to investing in Chinese stocks. Tracey and Ryan discuss the regulatory issues and possibility of government interference, among other risks.
But with double digit sales growth expected for the next few years, it’s hard to stay away from this group of stocks completely.
What else should investors know about the Chinese Internet and social media stocks?
Find out the answer to all of these questions and more on this week’s podcast.
The Other Market Edge Podcast on China
In August 2017, Tracey talked with one of Zacks millennial interns who had just spent a year studying in China.
What are Chinese Millennials buying? Where are they shopping? Where are they eating out? And how are they ordering? Is cash still king or are online payments the norm in China’s biggest cities?
Find out the answers to these questions and more in this fascinating discussion on China.
You might change the way you think about investing there.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere
1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging
phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks Market Edge Highlights: Baidu, Alibaba, JD.com, Tencent and Sina
For Immediate Release
Chicago, IL – Oct 26, 2017 – Zacks Market Edge is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here: (https://www.zacks.com/stock/news/280012/should-investors-buy-chinas-fang-stocks)
Should Investors Buy China’s FANG Stocks?
Welcome to Episode #104 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
In this episode, Tracey is joined by Zacks Editor Ryan McQueeney to discuss China and its Internet and social media stocks.
It’s no secret that Tracey has not been a big fan of investing in Chinese stocks over the last several years. She was among those burned by the Chinese scam companies about 6 years ago with companies that, it turned out, didn’t really exist.
But last week, she bought her first Chinese stock in her own personal portfolio in 6 years.
Making the Case for China
1. The Chinese economy has been weaker than the official economic data has indicated. While technically not in a recession, for an economy used to hyper-growth, it sure looked like one. But it appears like the Chinese economy may be coming out of that slow period.
2. The Chinese government has picked its winners in every industry and sector, including the Internet and social media stocks. These “winners” have the full backing of the government, which allows them to dominate the huge Chinese market.
3. Transparency appears to be better among these huge companies versus the smaller Chinese companies that went public just a decade ago. After all, Alibaba was the largest IPO of all time.
For investors who already own the American social media companies, why not add in the world’s most populous country and buy the Chinese equivalent?
China’s FANG Stocks
1. Baidu (BIDU - Free Report) is the Google of China. It gets ignored by investors but sales are expected to be up double digits this year and next and it trades with a forward P/E of just 35.
2. Alibaba (BABA - Free Report) needs no introduction. But it’s also not a pure online shopping platform as it also owns video platform Youku, which it bought in 2015 for $4 billion, as well as Alipay. It also has made a push into expansion outside of its Chinese home market, specifically into India and Southeast Asia.
3. JD.com (JD - Free Report) is the lesser known of China’s online shopping sites. Shares aren’t cheap, as they’re trading at 86x forward earnings but you should see sales growth over 25% this year and next.
4. Tencent (TCEHY - Free Report) owns the Facebook of China, which is called WeChat. As of the second quarter, the company was approaching nearly a billion users on that platform. It is also big in smart phone gaming as well as other hot areas like video and AI research.
5. Sina Corporation is the smallest of these companies with a market cap of just 7.6 billion. It’s an online media company which is the parent of Weibo. Weibo is the Twitter of China. In the second quarter, gross margins were 74%. It saw strong advertising demand on the Weibo platform.
As Tracey can attest to, there are certain risks to investing in Chinese stocks. Tracey and Ryan discuss the regulatory issues and possibility of government interference, among other risks.
But with double digit sales growth expected for the next few years, it’s hard to stay away from this group of stocks completely.
What else should investors know about the Chinese Internet and social media stocks?
Find out the answer to all of these questions and more on this week’s podcast.
The Other Market Edge Podcast on China
In August 2017, Tracey talked with one of Zacks millennial interns who had just spent a year studying in China.
What are Chinese Millennials buying? Where are they shopping? Where are they eating out? And how are they ordering? Is cash still king or are online payments the norm in China’s biggest cities?
Find out the answers to these questions and more in this fascinating discussion on China.
You might change the way you think about investing there.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere
1 billion iPhones in 10 years but a new breakthrough is expected to generate more
than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging
phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>
Tracey Ryniec manages the Insider Trader and Value Investor portfolios at Zacks.com. She hosts 2 weekly podcasts: Zacks Market Edge Podcast and the Value Investor Podcast. You can also catch her on Twitter at @TraceyRyniec.
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros.
Follow us on Twitter: https://twitter.com/zacksresearch
Join us on Facebook: https://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.