According to the Aggregated Portfolio of Gurus, a Premium feature, five China-based stocks broadly sold by gurus over the past three months include Baidu Inc. (BIDU, Financial), New Oriental Education & Technology Group (EDU, Financial), JD.com Inc. (JD, Financial), TAL Education Group (TAL, Financial) and Vipshop Holdings Ltd. (VIPS, Financial).
Fund exposure to China stocks hit two-year low amid regulatory crackdown
Credit Suisse Group AG (CS, Financial) said in an analyst note this week that hedge fund exposure to Chinese equities and indexes listed in the U.S. tumbled from approximately 2% at the end of 2020 to just around 0.75% as of Aug. 25, a two-year low. The Swiss-based firm said that 2021’s “sharp drop in ADR exposure” stems from price declines and client reductions as investors priced in regulatory uncertainty.
The Wall Street Journal added that Daniel Loeb (Trades, Portfolio), leader of Third Point LLC, told investors that his firm pared back its exposure to China in recent months "out of fear that President Xi Jinping may continue exercising power over financial markets.” According to historical portfolio statistics, a Premium feature, Loeb sold his stake in Alibaba Group Holding Ltd. (BABA, Financial) during the first quarter.
GuruFocus’ Aggregated Portfolio also looks at broadly sold stocks
While the Aggregated Portfolio primarily considers the most-broadly held stocks or the most-bought stocks, the portfolio also allows users to track the stocks broadly sold by gurus. Investors can also monitor trends in the stocks that gurus are discarding from their portfolios.
Eighteen gurus sold shares of Baidu (BIDU, Financial) during the past three months, including George Soros (Trades, Portfolio)’ Soros Fund Management and Catherine Wood (Trades, Portfolio)’s ARK Investment.
New Oriental Education and Technology
Ten gurus sold shares of New Oriental Education and Technology (EDU, Financial) during the past quarter, including Jeremy Grantham (Trades, Portfolio)’s GMO and Chase Coleman (Trades, Portfolio)’s Tiger Global Management.
GuruFocus ranks the education company’s profitability 9 out of 10 on the back of a five-star business predictability rank and a three-year revenue growth rate that outperforms more than 83% of global competitors.
Despite high profitability, New Oriental Education’s financial strength ranks 4 out of 10 on several warning signs, which include a weak Altman Z-score of 1.44 and a debt-to-equity ratio that is higher than 4 and underperforms over 75% of global competitors.
GuruFocus ranks the e-commerce company’s financial strength 7 out of 10 on several positive investing signs, which include a high Piotroski F-score of 7 and debt ratios outperforming more than 80% of global competitors.
TAL Education Group
GuruFocus ranks the tutoring company’s financial strength 4 out of 10 on several warning signs, which include a low Altman Z-score of 1.18 and a debt-to-equity ratio that underperforms more than 73% of global competitors.
GuruFocus ranks the discount retailer’s financial strength 8 out of 10 on several positive investing signs, which include a high Piotroski F-score of 7, a strong Altman Z-score of 4.56 and interest coverage and debt ratios that outperform more than 86% of global competitors.
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