In light of Chinese New Year, our gurus have high combined weightings in three major China-based companies: Alibaba Group Holding Ltd. (BABA, Financial), Baidu Inc. (BIDU, Financial) and JD.com Inc. (JD, Financial).
Screener lists the top Chinese guru picks
The “Top Chinese New Year 2018 Guru Picks” screener lists companies that meet the following criteria:
- Company equals Hong Kong or China (Fundamental tab)
- Guru minimum weighting at least 5% (Gurus tab)
The screener lists Alibaba and JD.com if the “Hedge Fund Gurus” are selected. On the other hand, the screener lists Alibaba and Baidu if the “Mutual Fund Gurus” are selected.
Alibaba
According to the screener, Alibaba has a 72.57% combined weight among hedge fund gurus and a 22.10% combined weight among mutual fund gurus.
Chris Davis (Trades, Portfolio) and Pioneer Investments (Trades, Portfolio) expanded their Alibaba position 530.03% and 8,940.30% during fourth-quarter 2017.
According to a previous article, Davis increased his Alibaba position as the company offers good growth potential. The company has two positive investing signs, including expanding operating margins and strong revenue and earnings growth. GuruFocus ranks Alibaba’s business predictability four stars.
Baidu
Mutual fund gurus have a combined weight of 33.73% according to the Screener results. Pioneer Investments ]contributed most to the weighting by expanding its Baidu position 8,004.62% during the quarter.
Baidu CEO Robin Li said the company “strengthened [the] management team and built strong momentum by adopting AI-first in [the company’s] mobile business and investing in new AI business” during 2017. Full-year consolidated revenues increased 20% from the prior year, contributing to a three-year revenue growth rate that outperforms 76% of global competitors. Like Alibaba, Baidu also has a business predictability rank of four stars, suggesting consistent revenue and earnings growth over the past 10 years.
JD.com
Hedge fund gurus have a combined weight of 21.01% in JD.com according to the Screener results.
JD.com, China’s second-largest e-commerce company in terms of transaction volume, has a financial strength rank of 6. Although the company has a robust Altman Z-score, the company’s Piotroski F-score is a modest 6, driven primarily by negative returns on assets and lower asset turnover from the prior-year quarter.
See also
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Happy Chinese New Year from GuruFocus!
Disclosure: The author does not have positions in the stocks mentioned.
