In light of Beijing tightening its presidential power, four Chinese stocks that have high guru ownership based on second-quarter 13F filings and are trading near 52-week lows as of Monday are Alibaba Group Holding Ltd. (BABA, Financial), Baidu Inc. (BIDU, Financial), NetEase Inc. (NTES, Financial) and Silicon Motion Technology Corp. (SIMO, Financial) according to the All-in-One Screener, a Premium feature of GuruFocus.
On Sunday, China President Xi Jingping added several loyalists to the country’s core circle of power, paving the way for his third five-year term as president of China. The Invesco Golden Dragon China ETF (PGJ), which tracks the performance of U.S. exchange-listed stocks headquartered in China, tumbled over 16% on Monday on the heels of the power reshuffle.
As investors monitor changes to the Chinese government, several stocks are trading near 52-week lows yet have high guru ownership as of the second-quarter 13F portfolio filings.
Investors should be aware 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
Alibaba
Twenty-one gurus own shares of Alibaba (BABA, Financial) with a combined weight of 32.43%.
Shares of Alibaba traded around $61.64, showing the stock is significantly undervalued based on its price-to-GF Value ratio of 0.18 as of Monday. The stock trades approximately 5.26% above its 52-week low of $58.01.
The Hangzhou, Zhejiang-based e-commerce giant has a GF Score of 78 out of 100 based on a growth rank of 10 out of 10, a profitability rank of 9 out of 10, a financial strength rank of 7 out of 10, a GF Value rank of 2 out of 10 and a momentum rank of 1 out of 10.
Alibaba’s profitability ranks 9 out of 10 on several positive investing signs, which include a 3.5-star business predictability rank and an operating margin that outperforms more than 78% of global competitors despite declining approximately 19% on average over the past five years.
The company’s financial strength ranks 7 out of 10 on the back of cash-to-debt ratios and debt-to-equity ratios outperforming approximately 80% of global retail competitors despite having a modest Altman Z-score of 2.57.
Gurus with holdings in Alibaba include Charlie Munger (Trades, Portfolio)’s Daily Journal Corp. (DJCO, Financial), David Herro (Trades, Portfolio)’s Oakmark International Fund and PRIMECAP Management (Trades, Portfolio).
Baidu
Twelve gurus own shares of Baidu (BIDU, Financial) with a combined weighting of 7.54%.
Shares of Baidu traded around $79.75 on Monday. The stock is approximately 7.21% above its 52-week low of $73.58.
GuruFocus labeled the Beijing-based online search giant a possible value trap based on its low price-to-GF Value ratio of 0.58 and low momentum rank of 4 out of 10. Despite the low momentum rank, Baidu has a GF Score of 89 out of 100 based on a GF Value rank of 10 out of 10, a growth rank of 9 out of 10, a profitability rank of 8 out of 10 and a financial strength rank of 6 out of 10.
Baidu’s financial strength ranks 6 out of 10 even though the company’s debt-to-equity ratio of 0.44 underperforms more than 76% of global competitors. Additionally, the company has a low Altman Z-score of 1.47 and an interest coverage ratio that underperforms approximately 91% of global competitors.
Gurus with holdings in Baidu include PRIMECAP Management (Trades, Portfolio), Dodge& Cox and Baillie Gifford (Trades, Portfolio).
NetEase
Seven gurus own shares of NetEase (NTES, Financial) with a combined weight of 1.05%.
Shares of NetEase traded around $56.28, showing the stock is significantly undervalued based on its price-to-GF Value ratio of 0.50. The stock trades approximately 4.61% above its 52-week low of $53.09.
The Hangzhou, Zhejiang-based online gaming service and media company has a GF Score of 95 out of 100, driven by a rank of 10 out of 10 for profitability and growth, a GF Value rank of 8 out of 10 and a financial strength rank of 7 out of 10 despite momentum ranking just 4 out of 10.
NetEase’s profitability ranks 10 out of 10 on several positive investing signs, which include a 3.5-star business predictability rank, a high Piotroski F-score of 8 out of 9 and an operating margin that outperforms approximately 80% of global competitors despite declining by approximately 10% per year on average over the past five years.
Gurus with holdings in NetEase include Dodge & Cox and Ken Fisher (Trades, Portfolio)’s Fisher Investments.
Silicon Motion Technology
Four gurus own shares of Silicon Motion Technology (SIMO, Financial) with a combined weight of 0.46%.
Shares of Silicon Motion Technology traded around $52.11 on Monday, approximately 0.07% above its 52-week low of $52.07.
The Hong Kong-based semiconductor company has a GF Score of 94 out of 100, driven by a financial strength rank of 10 out of 10, a rank of 9 out of 10 for profitability and momentum and a rank of 8 out of 10 for growth and GF Value.
Silicon Motion Technology’s financial strength ranks 10 out of 10 on several positive investing signs, which include no long-term debt, a high Piotroski F-score of 7 out of 9 and a high Altman Z-score of 6.53.
