The Chinese economy continues to grow faster than almost any other country in the world — at an annual pace of roughly 6%. The middle class is expanding by millions each year, and that has led to a Chinese consumer who is spending instead of saving for the first time ever.
Still, consumer-related stocks have come under pressure over the last year on fears of a slower economy. Add in the trade issues with the United States and Chinese stocks fell into a deep bear market last year.
This created screaming long-term buying opportunities that still exist.
There are many Chinese stocks worth keeping an eye on as bargain buys at current prices, but there are three in particular that stand above the rest. Let me tell you a bit about each …
JD.com (NASDAQ:JD) has had its fair share of issues in the last year, including both macro events and company-specific headlines. But even as the negative news continues to swirl, the company is still expected to increase revenue from $53 billion in 2017 to $81 billion this year.
The e-commerce and online retail infrastructure provider is trading with a price-sales (P/S) ratio below 1 and is extremely undervalued at current prices. It is certainly worth watching as Chinese consumer stocks come back in favor.
This is one of China’s two leading technology companies, with the other being Tencent Holdings (OTCMKTS:TCEHY). Alibaba (NYSE:BABA), an e-commerce and internet giant, has ties to nearly every aspect of the Chinese consumer from online shopping to banking and lending.
The strength of BABA’s brand alone makes it a benchmark for the Chinese consumer.
BABA stock has taken a hit with the Chinese market in general, but as things begin to turn around I expect to see Alibaba as a leader. I view the stock as a core holding for any international portfolio.
Ctrip.com International (CTRP)
Ctrip.com (NASDAQ:CTRP) is an online travel site in China. Think about Expedia and Kayak. This is simply the Chinese version.
CTRP stock has been under pressure due to widespread selling as well as several analyst downgrades over the past few months. But here again, the negative short-term view of the company has created a great long-term buying opportunity.
The rising middle class in China yearns to travel, and CTRP will be a direct winner of an increase in both domestic and international travel in the months and years ahead.
Matthew McCall is the founder and president of Penn Financial Group, an investment advisory firm, as well as the editor of Investment Opportunities and Early Stage Investor. He has dedicated his career to getting investors into the world’s biggest, most revolutionary trends BEFORE anyone else. The power of being “first” gave Matt’s readers the chance to bank +2,438% in Stamps.com (STMP), +1,523% in Ulta Beauty (ULTA), +1,044% in Tesla (TSLA), +611% in Liquefied Natural Gas Limited (LNGLY), +324% in Bitcoin Services (BTSC), just to name a few. If you’re interested in making triple-digit gains from the world’s biggest investment trends BEFORE anyone else, click here to learn more about Matt McCall and his investments strategy today.
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