Despite U.S. markets tumbling on Tuesday on weakening trade optimism, gurus are still pouring capital into Asian securities.
According to the Aggregated Portfolio, a GuruFocus Premium feature, the five most-broadly-held guru stocks from Asia are Alibaba Group Holding Ltd. (BABA, Financial), Baidu Inc. (BIDU, Financial), JD.com Inc. (JD, Financial), Taiwan Semiconductor Manufacturing Co. Ltd. (TSM, Financial) and New Oriental Education & Technology Group Inc. (EDU, Financial).
Dow tumbles over 250 points as trade optimism fades, yet still off intraday lows
The Dow Jones Industrial Average closed at 27,503.35 despite reaching an intraday low of 27,325.13: The intraday low represented a decline of 457.91 points from Monday’s close of 27,783.04. Apple Inc. (AAPL, Financial), the top holding of Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway (BRK.A, Financial)(BRK.B, Financial), closed at $259.45, down 1.78% from the previous close.
President Donald Trump said at the NATO summit in London that while China “wants to make a deal right now,” he would prefer to wait until after the 2020 presidential election to make a trade deal. Trump also said he has “no deadline” for the trade deal, further dampening hopes for “phase one” of the negotiations.
Investors are also centering on Dec. 15, the day that increased tariffs on China-made laptops and smartphones are due to take effect.
Gurus continue owning shares of Asian companies
Despite the potential for high volatility, gurus are still putting capital into Asian stocks. GuruFocus’ most-broadly-held portfolio has outperformed the Standard & Poor’s 500 Index benchmark in at least four of the past five years according to our model portfolio page.
Alibaba
Thirty-one gurus own shares of Alibaba with a combined holding of 120.49%. Gurus with large positions in the e-commerce giant include PRIMECAP Management (Trades, Portfolio) and Ken Fisher (Trades, Portfolio).
The Hangzhou, Zhejiang-based company operates several online and mobile commerce platforms, including Taobao and Tmall. GuruFocus ranks Alibaba’s profitability 9 out of 10 on several positive investing signs, which include consistent revenue growth over the past 10 years and operating margins that are outperforming 94.01% of global competitors despite languishing near a 10-year low of 15.32%.
Baidu
Twenty-four gurus own shares of Baidu with a combined weight of 28.02%. Gurus with large holdings in Baidu include Sarah Ketterer (Trades, Portfolio) and Dodge & Cox.
The Beijing-based company operates online media platforms like the Baidu search engine, Baidu Maps and the Baidu Baike encyclopedia. Although the company has a solid GuruFocus business predictability rank of three stars, Baidu also has a weak Piotroski F-score of 3 and operating margins that underperform 52.02% of global competitors.
JD.com
Seventeen gurus own shares of JD.com with a combined holding of 23.46%. Chase Coleman (Trades, Portfolio)’s Tiger Global Management has the largest stake in the Beijing-based commerce company with 52,850,336 shares as of quarter-end.
GuruFocus ranks JD.com’s financial strength 7 out of 10 on the back of cash-to-debt and debt-to-equity ratios outperforming over 71% of global competitors. Despite this, JD.com’s operating margin underperforms 69.08% of global cyclical retail companies.
Taiwan Semiconductor
Seventeen gurus own shares of Taiwan Semiconductor with a combined weight of 16.03%.
GuruFocus ranks the Taiwan-based semiconductor company’s profitability 10 out of 10 on several positive investing signs, which include a five-star business predictability rank and operating margins that have increased approximately 1.10% per year on average over the past five years and are outperforming 96.72% of global competitors.
New Oriental Education
Fourteen gurus own shares of New Oriental Education with a combined weight of 11.30%.
The Beijing-based company offers educational programs, services and products that help students get an advantage in the workplace and improve quality of life. GuruFocus ranks New Oriental Education’s profitability 10 out of 10 on several positive investing signs, which include a 4.5-star business predictability rank and a three-year revenue growth rate that outperforms 83.43% of global competitors. Despite this, operating margins have contracted approximately 8.5% per year over the past five years.
Disclosure: No positions.
Read more here:
- 5 Manufacturing Companies Gurus Broadly Own
- US Markets Start December Significantly Overvalued
- Ron Muhlenkamp’s Firm Starts 3 Positions in 3rd Quarter
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