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Bear of the Day: Autohome (ATHM)

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Chinese stocks can be sketchy to invest in. It’s not about any sort of prejudices people have to these Chinese companies, it’s about information. Personally, I don’t have enough of an understanding of the Chinese market to give some of these obscure names the careful eye and analysis they deserve. Researching these names can be tough because of the language barrier. It’s easy to understand huge companies like Alibaba (BABA - Free Report) but it’s much tougher with smaller ones in niche markets.

Sprinkle in trade tariffs and escalations in the trade war and you have a lot of chips stacked against you. That’s why I’m naming Autohome (ATHM - Free Report) as today’s Bear of the Day. Autohome Inc. operates as an online destination for automobile consumers in the People's Republic of China. The company, through its Websites, autohome.com.cn and che168.com, delivers comprehensive, independent, and interactive content to automobile buyers and owners.

Right now, Autohome is a Zacks Rank #4 (Sell) in an industry that ranks in the Bottom 41% of our Zacks Industry Rank. If you look at earnings estimates for the current quarter and next quarter, you can see the bearish sentiment in the stock. Over the last sixty days, the Zacks Consensus Estimate has come down from 88 cents to 78 cents for the current quarter while next quarter’s number has come down from $1.45 to $1.07.

Autohome shares were trading near $119 in June 2018. Since then the stock has come under serious pressure. Its value has nearly been cut in half, trading all the way down to $69.22 earlier this month before bouncing the last four days. The stock is down at $77.35 right now as the 50-day moving average is about to cross under the 200-day.

Investors looking for other stocks in the same industry should check out Zacks Rank #2 (Buy) 21Vianet (VNET - Free Report) and ANGI Homeservices (ANGI - Free Report) .

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