|Bid||175.24 x 900|
|Ask||175.25 x 900|
|Day's Range||174.07 - 175.45|
|52 Week Range||129.77 - 198.35|
|Beta (3Y Monthly)||1.84|
|PE Ratio (TTM)||50.15|
|Earnings Date||Aug 21, 2019 - Aug 26, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||218.13|
Despite trade tensions between the U.S. and China and Altaba (NASDAQ:AABA) liquidating its stake in Alibaba (NYSE:BABA), Alibaba stock has done very well in 2019, rising 21% year-to-date. A big part of its success this year is BABA's plan to list its shares in Hong Kong.Source: Shutterstock According to Bloomberg, Alibaba has filed confidentially for a Hong Kong listing in what could be the territory's biggest listing sale since 2010. Although the final fundraising target isn't finalized, Alibaba could raise as much as $20 billion from the listing.Before it IPO'd in New York in 2014, Alibaba considered listing in Hong Kong but decided against it due to tougher ownership regulations in the territory. If Alibaba listed in New York, Jack Ma and cofounder Joseph Tsai could still retain control of the company despite not owning a majority percentage of Alibaba. In Hong Kong, Ma and Tsai would not be able to control Alibaba so effectively.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAlthough Hong Kong hasn't changed its ownership rules, Alibaba is now much more inclined to a Hong Kong listing. First, Jack Ma plans to retire and focus more on philanthropy. Second, the Chinese government seems to want more Chinese companies to list in China rather than in New York. * 10 Stocks Driving the Market to All-Time Highs (And Why) Naturally, many investors wonder how much upside a Hong Kong listing would mean for Alibaba's U.S. shares. A Listing That's Bullish, But Only Partly SoI believe Alibaba's U.S. listed stock will benefit from the listing, but only slightly. If Alibaba were to list in Hong Kong, I believe the stock would be valued at a higher multiple than its current valuation in New York. More people use Alibaba's services and websites in China and Hong Kong, and the added awareness will likely generate more buying from retail investors, which could give Alibaba a higher valuation. While that sounds like great news for U.S. owners of Alibaba, it's only partly bullish because the two exchanges are hard to arbitrage. In an ideal world, if Alibaba's stock in Hong Kong were priced higher than it was in New York, an astute investor could buy the New York stock and sell the Hong Kong stock, and hope for an eventual closing in a relatively risk-free manner. The problem is that a closing isn't guaranteed to happen in the real world. Although the Hong Kong dollar is pegged to the U.S. dollar, there isn't a Hong Kong New York stock exchange connect where an investor could easily buy the Hong Kong listed Alibaba stock and simultaneously sell the New York listed stock. Meaningful discounts between similar securities have also persisted for many years before. For a long time, South African conglomerate Naspers traded for a 30% discount to its Tencent (OTCMKTS:TCEHY) stake alone, despite Naspers owning things outside of Tencent. Are There Plenty More Reasons to Buy Alibaba Stock?There is a lot to like about BABA stock besides the fact that it will list in Hong Kong. Although it dominates e-commerce in China, BABA trades for just 19 times forward earnings estimates, which almost makes it a value stock considering its future earnings growth potential. Furthermore, Alibaba isn't just an e-commerce play. Due to various astute investments, Alibaba has exposure to China's mobile payments market with partial ownership of Alipay, exposure to China's cloud growth with Alibaba Cloud, and exposure to a variety of future markets due to its leadership in artificial intelligence. By being one of China's top two tech companies, Alibaba has the financial resources to buy or copy the business models of competitors that might disrupt it. It has the financial resources to invest in startups of promising sectors and participate in their growth as well. * 7 Stocks Being Inflated by Low Rates As for the potential long-term effect of the Hong Kong listing, the listing could improve Alibaba's fundamentals if management executes. If the company uses the money raised for productive purposes such as investing more in the cloud or artificial intelligence, Alibaba's margins and earnings-per-share could go higher and that'll benefit investors everywhere, not just in Hong Kong.As of this writing, Jay Yao did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Dependable Dividend Stocks to Buy * 10 Stocks Driving the Market to All-Time Highs (And Why) * 7 Short Squeeze Stocks With Big Upside Potential The post Will Alibaba Stock Soar Thanks to Its Hong Kong Listing? appeared first on InvestorPlace.
(Bloomberg Opinion) -- Since the U.K. decided more than three years ago to leave the European Union, the nation's savviest investors have succeeded by putting their money where Brexit matters least.Uncertainty about the date of Britain’s departure (now pushed back to Oct. 31) and the terms of the divorce has meant purging the U.K. from their holdings or limiting them to investments traditionally impervious to man-made and natural disasters. Over 38 months, British sterling depreciated 16 percent, the worst shrinkage for any similar period in 8 years. The pound remains the poorest performer in the actively-traded foreign exchange market and inferior to the No. 3 euro.Europe's strongest major economy in the 21st century became a shadow of its former self, reversing two decades preceding the June 23, 2016 referendum when the U.K. outperformed the European Union in growth and investment. London's stock and bond markets similarly languished as laggards to world benchmarks, after beating them consistently in the 20 years prior to the decision to leave the EU, according to data compiled by Bloomberg.“If I give myself some credit, I would say that we acted reasonably fast liquidating U.K. shares” in 2016, said Ben Rogoff, whose Polar Capital Technology Trust PLC has been the most consistent winner out of the 212 British global funds with at least 1 billion pounds this year and during the past three years. His team's 114 percent total return (income plus appreciation) was 22 percentage points better than the Dow Jones World Technology Index, mostly because 68% of the fund is invested in the U.S., two-thirds of that in California companies, according to data compiled by Bloomberg. “It's all about the Internet and where do you get exposed to the Internet? The U.S. and China,” Rogoff said last month during an interview at Bloomberg in London.While Rogoff reduced his holdings of three California tech powers during the past year — Cupertino-based Apple Inc., Menlo Park-based Facebook and Santa Clara-based Advanced Micro Devices — he acquired more shares in Hong Kong-based Tencent Holdings Ltd, Hangzhou-based Alibaba Group Holding Ltd, South Korea's Samsung Electronics Co. and Tokyo-based Yahoo Japan Corp., according to data compiled by Bloomberg.The 46-year-old graduate of St. Catherine's College, Oxford, became the lead manager of the trust in 2006, “and at that time,” he said, “the U.K. weighting might have been 5% to 10%, so if you had already been backing away to the door, it's a lot easier to escape than if you built a career around being an expert in U.K. equities.” Since the Brexit referendum, he said, “There's just been a complete buyers' strike of U.K. equities.”Proof of such disdain comes with the crisis this year at the LF Woodford Equity Income Fund, Britain's most-prized investment when it was launched by star money manager Neil Woodford in 2014. The celebrated stock picker became even more prominent with his contrarian bullish stance on Brexit. The fund plummeted 31% during the past two years by holding a combination of large and small U.K. companies and has frozen redemptions indefinitely.“It's symptomatic of a broader problem,” Bank of England Governor Mark Carney told reporters earlier this month. “Our sense is that the financial-stability risks are increasing.”One U.K. investor who’s successfully resisted the trend away from domestic stocks is Nick Train, who manages Finsbury Growth & Income Trust. It returned 61% the past three years — more than twice the FTSE All-Share Index benchmark — as the most consistent one- and three-year performer among the 129 U.K.-based funds investing mostly in domestic stocks or bonds, according to data compiled by Bloomberg. Unlike Woodford, who doubled down on the British economy writ large, Train, a 60-year-old graduate of Queen’s College, Oxford, dramatically increased his holdings in consumer staples. These are the companies that make such essentials as food, beverages and household goods and can resist business cycles because their products always are in demand.Train, who declined to be interviewed, increased the consumer staples weighting relative to the benchmark to 27% from 23% in 2015 and he enhanced his holdings of Deerfield, Illinois-based Mondelez International Inc., which manufactures and markets packaged food products, and London-based Diageo PLC, the world's largest producer of spirits and beer, according to data compiled by Bloomberg.That's likely to be a safe bet as no one is counting on the British economy rebounding significantly from near the bottom of the EU while the uncertainty created by Brexit persists. “If you take a long view, then this may well be a great time to be investing in U.K. equity,” said Rogoff. “Thankfully, I don't have to make that binary call because there are very few U.K. companies I'm frankly interested in.”\--With assistance from Shin Pei, Richard Dunsford-White, Kateryna Hrynchak and Suzy Waite.To contact the author of this story: Matthew A. Winkler at email@example.comTo contact the editor responsible for this story: Jonathan Landman at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Matthew A. Winkler is a Bloomberg Opinion columnist. He is the editor-in-chief emeritus of Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
China still has a lot of headroom to add more Internet and mobile payments users, as a recent report highlights.
China released its second-quarter GDP report today. The country’s GDP expanded 6.2% in the second quarter, marking its slowest growth since 1992.
Some of China’s highest-profile bicycle-sharing companies have crashed into bankruptcy in the past year after burning billions of renminbi in investor cash, but one has quietly pedalled past the sector’s early entrants to provide 20m rides to customers each day.
Semtech's (SMTC) LoRa devices will be integrated into HWM's smart water meter solutions to improve operations and reduce management costs.
The battle for market share in China's ecommerce arena is over. Alibaba (NYSE:BABA) won. There's no reason for JD.Com (NASDAQ:JD) shareholders decide to dump their JD stock, though. Alibaba isn't as well-positioned to dominate the next chapter of eastern Asia's maturing online-shopping industry; JD.com is the name to own on that front.Source: Shutterstock The next chapter is distinctly different from the previous one. Alibaba was largely in the right place at the right time, stealing a few pages from the Amazon (NASDAQ:AMZN) playbook at a time when China's outlying areas were first accessing broadband, and smartphones were becoming the norm. JD arrived a little too late to that party.With the country's ecommerce market now relatively well saturated, the next chapter is one that will sell omnichannel and brick-and-mortar retailing support as a service in and of itself. That's something JD has been doing for a while.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond Logistics and JD StockIt was laying the groundwork for the marketable service long before logistics became a revenue-bearing product.As far back as 2014, JD had already established more than 80 warehouses, more than 1,600 delivery stations and more than 200 pickup sites in almost 500 Chinese cities. Same-day delivery was readily possible in most locales, and where it wasn't easy, the nascent ecommerce outfit partnered with local convenience stores.It was a network that would serve as the framework for something much bigger, however.In early 2017, with deliveries and online-selling mostly mastered, JD partnered with Zebra to address the inevitable future of retail. The creation of the IoT + E-commerce Logistics Lab set the stage for higher-level things like data gathering and machine vision that would further obscure any seams between the steps taken between a consumer's purchase and final delivery.The logistics-as-a-service unit had become so well gelled, in fact, that in early 2017 JD.com spun it off as a stand-alone entity, though it didn't stop development there. By last year, JD opened up its logistics network to third-party consumers and businesses, handling goods that weren't directly sold to buyers out of JD's inventory.Although it's a separate entity, there's no disguising that JD Logistics largely exists to support JD.Com. The ecommerce site still owns more than 80% of JD Logistics, which just raised more than $200 million to invest in other logistics companies and related technologies.JD is offering solutions to China's consumer-oriented companies -- and small players in particular -- that Alibaba isn't at a time when e-commerce spending (and offline spending) growth is slowing down. The Alibaba Threat and JD StockThat's not to suggest Alibaba isn't developing marketable solutions of its own as the market's e-commerce industry marches toward its peak.Case in point: In late 2017, Alibaba began work that would allow China's six million small stores to plug into the power of cloud computing.The platform, called Retail Integrated, was designed to help mom-and-pop shops streamline inventory purchasing and improve sales. The service was free, as long as users let Alibaba use those stores as shipping dropoff and delivery points, and store owners were willing to share valuable customer data.By 2018, the e-commerce behemoth was using much of that technology to make its own grocery store chain, Hema, a state-of-the-art experience. The use of QR codes on a product's label not only serves as a means of providing more information, but it's also how consumers can select and pay for goods while they shop using nothing but their smartphones.The technology even allows Hema stores to map out the typical path shoppers take through the aisles, identifying less-visited and more visited areas.Alibaba's retail tech has its fans and users to be sure, but adoption has been modest. The solution is for a problem most of China's small shops aren't convinced they have. What they really need is logistics solutions and foot traffic coming into their stores to begin with.That's what JD.Com and JD Logistics are offering. Looking Ahead for JD StockInvestors should absolutely keep things in perspective.JD stock may have an edge right now with a much better-developed and more thoughtful logistics solutions, but Alibaba is still Alibaba. It can buy what it's not yet developed. To that end, in March it invested nearly $700 million in China's delivery and logistics outfit STO Express. It's not done anything to alter STO's operation, but there's a reason it wants a seat at the table.JD isn't merely coasting on its past developments though. JD Logistics continues to work in a way that maintains its lead on the logistics front. That, at least indirectly, supports JD.com's ecommerce ambitions.It's also a huge, even if overlooked, undertow that could let JD stock outperform most other names on China's e-commerce landscape for the long haul.As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about him at his website jamesbrumley.com, or follow him on Twitter, at @jbrumley. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy for Less Than Book * 7 Marijuana Stocks With Critical Levels to Watch * The 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond The post Alibaba Looms Large, but Logistics Keeps JD Stock Growing appeared first on InvestorPlace.
(Bloomberg Opinion) -- Anheuser-Busch InBev NV blamed market conditions for its decision to pull what would have been the world’s biggest initial public offering this year. Yet the brewer should take at least some responsibility. This concoction was far too frothy for investors when Asian economies face an array of sobering realities.AB InBev said it will no longer proceed with the IPO of its Asia-Pacific business, Budweiser Brewing Company APAC Ltd., which had been aiming to raise as much as $9.8 billion in Hong Kong. The company’s American depositary receipts fell as much as 4.9% in New York before closing down 3% on Friday.The offering valued Budweiser Brewing between 15.5 times and 18.2 times earnings before interest, tax, depreciation and amortization – well above the multiples for Carlsberg A/S and Heineken NV, and a premium to shares of the parent. The price range of HK$40 to HK$47 ($5.11 to $6.01) a share would have resulted in a market capitalization of $54.2 billion to $63.7 billion.You can hardly blame investors for wanting to sit this one out. The U.S.-China trade war is at an impasse and the ripples are widening. Singapore, a bellwether for global trade, on Friday posted its sharpest growth decline since 2012. While the Federal Reserve has signaled that interest rate cuts are coming, which has buoyed U.S. stocks, that's also driving a wedge between the world’s biggest economy and the rest.This split is perhaps nowhere more apparent than the IPO market. Listings in the U.S. are on track for their best year since 2014. Hong Kong, the top destination last year, is languishing by comparison, after a series of high-profile bloopers including smartphone maker Xiaomi Corp. in July 2018 and food-delivery giant Meituan Dianping in September. As I’ve argued, reclaiming that crown will be an uphill battle; and now Hong Kong is facing competition from Shanghai for tech IPOs. Alibaba Group Holding Ltd.’s secondary listing plan is a ray of light – but this latest kerfuffle could dim any optimism.Against this dismal backdrop, it’s little wonder things went south. Yet it’s a mistake to overlook AB InBev’s own missteps. For one thing, the company marketed itself as a purveyor of high-end beer, taking cues from Chinese consumers’ growing taste for foreign brands and craft labels. Perhaps its price range doesn’t look so out of whack when you consider the country's brewers trade anywhere between 15 times and 21 times, according to Bloomberg data. Yet investors just weren't convinced that demand would hold up in a slowing economy. The company’s China pitch also ignored mature markets like South Korea and Australia, which make up around half of Budweiser Brewing’s Ebitda, according to Bernstein Research. Then there’s the fact that growing a brand in Asia's fragmented market is easier said than done. India, where whiskey is the traditional tipple of choice, and Southeast Asia could have been fertile ground for expansion. One argument for an Asia IPO was that Budweiser Brewing would benefit from local tie-ups. Would the Thai tycoon who owns Vietnam’s top brewer, Sabeco Trading Corp., or the magnate that controls the Philippines’ San Miguel Corp. really cede control to the Belgian brewer for a piece of the Hong Kong listing? I’m unconvinced.The fatal flaw, however, may have been AB InBev’s hubris. In deciding against a cornerstone investor tranche, the company eschewed a fixture of Hong Kong’s IPO market. It turns out investors really do like the comfort of big names that pledge to hold stock – even if the practice ties up a lot of liquidity. Had Budweiser’s listing succeeded, it would have been a win for market reform, too. With such a bubbly valuation, AB InBev may have thought its investors were wearing beer goggles. Whether the brewer can make a dent in that $103 billion net debt from its purchase of SABMiller looks a lot less certain after a cold shower and pot of black coffee.To contact the author of this story: Nisha Gopalan at email@example.comTo contact the editor responsible for this story: Rachel Rosenthal at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
The e-commerce company reported strong sales in a flurry of promotional events in the first half of June. Sales in lower-tier cities are likely to be key to whether that continues.
Can the former payments monopoly in China regain lost ground against the payment systems of Alibaba and Tencent?
Walmart (NYSE:WMT) stock keeps hitting new all-time highs. Meanwhile Amazon.com (NASDAQ:AMZN) just reclaimed the $2,000 per share level for the first time this year. Amazon stock is only a stone's throw away from breaking its own all-time high at $2,050 per share.Source: Shutterstock With both retailers are seeing their shares prices skyrocket, which is the better play for investors? Is Walmart, the king of physical retail, or Amazon, the king of online, doing better? Here's what investors need to know. Walmart: Ecommerce Suffering Sizable LossesA recent article in Recode reported that Walmart's ecommerce division is losing at least $1 billion per year. That's on sales of roughly $21 billion annually, suggesting that Walmart's online sales have at least a negative five percent profit margin.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond This makes Amazon, whose retail is marginally profitable, look great by comparison. Several years after Walmart's big Jet.com acquisition, it still hasn't gotten much closer to making money online.The Recode article suggests that some of Walmart's management team is losing patience with the company's online efforts. If so, that could offer a huge boost for Amazon stock. If Walmart pulls back on its online efforts, it will be a massive win for Amazon in its home market. Amazon: Rivals Making Big Payments PlaysOne area of potential weakness for Amazon is with payments. Amazon has the best check-out experience online on its own website, and Amazon Pay has achieved some success.But it never built something like eBay (NASDAQ:EBAY) did with PayPal (NASDAQ:PYPL) gathering huge fees and revenue streams from outside its own platform.Other online retailers, by contrast, have been able to develop huge businesses in this area. Alibaba's (NYSE:BABA) Alipay is one big example.MercadoLibre (NASDAQ:MELI) has its thriving MercadoPago platform as well. Other independent emerging markets payment companies such as PagSeguro (NASDAQ:PAGS) have been racking up strong valuations as well.Meanwhile, Amazon's hold on the best checkout technology is also under attack. Startup Bolt just raised a bunch of money to expand its checkout platform which allows smaller retailers to compete more effectively with Amazon.Bolt helps give small websites faster checkouts, fraud protection, and so on, making it easier for firms to compete with Amazon in user experience. Walmart Score Big in IndiaAnd it looks like Walmart scored a big entry into this market as well. That's through its Indian Flipkart acquisition.At the time, analysts criticized Walmart for overpaying; Flipkart was supposed to have many obstacles in that market. And while the ecommerce part of Flipkart has arguably underperformed expectations, Walmart got a huge bonus.Flipkart has a mobile payments division called PhonePe (pronounced as Phone Pay). Though it was just founded in 2015, PhonePe has already taken off.The Indian government cracked down on cash a couple years ago. It aimed to reduce tax evasion. In doing so, it set the stage for digital payments. PhonePe's business has absolutely exploded since then.PhonePe is now aiming to raise $1 billion of funding at a $10 billion valuation. At least one analyst thinks the firm is worth 50% more than even that gaudy figure.Given that Walmart only paid $16 billion for Flipkart, they may have gotten a steal. If the payments arm alone is worth $10 billion+, the core Flipkart retail business was a bargain. Amazon: Not Winning at GroceryIn theory, Amazon's blockbuster move to buy Whole Foods was supposed to shake up food retail forever. So far, Amazon's actual results have fallen far shorter of consumers' expectations.Some of this is on Amazon for its messaging. Amazon started off with seemingly aggressive price cuts, giving folks the expectations that Whole Foods would be more reasonably priced. Perhaps Whole Foods would finally lose the "Whole Paychecks" nickname.But it wasn't to be. Bloomberg reported that the price of a constant basket of roughly $400 of food at Whole Foods has dropped by only $10 - or a mere 3 percent - since Amazon took over.This figure is based on analysis from Gordon Haskett Research Associates. That firm has priced out the same group of goods at one New Jersey Whole Foods location nine times over the past two years.It has found that Whole Foods did cut prices heavily in one area: produce. The cost of Whole Foods' produce has fallen more than 15% since 2017. Dairy has also dropped a few percent. But frozen goods, dry goods, and beverages have all been about flat.Meanwhile, the price of bakery items and of snack foods have gone up significantly since Amazon took over. On net, the average consumer has saved hardly anything unless they only shop at Whole Foods for produce.This could be a major problem for Amazon stock going forward as it faces off with its biggest rival in grocery: Walmart. Say what you will about Walmart's e-commerce efforts, they are the best of the national retail chains at logistics, hands down.That's how Walmart has maintained such low prices over the decades, and it's how Walmart is able to compete with Amazon on one and two-day shipping now.If Amazon can't figure out how to lower grocery prices and still make money, Walmart will eat its lunch in this all-important sector of the retail economy. Amazon Stock VerdictAmazon stock and WMT stock are rising for different reasons. Amazon Web Services continues to perform phenomenally. As a result, investors are delighted to own Amazon stock.With all the SaaS and cloud stocks soaring, it makes sense that Amazon is powering to new highs.But in its core retail business, Amazon is showing some vulnerability. It's really underwhelmed with its Whole Foods rollout in particular.If Walmart is willing to keep taking losses in ecommerce for the time being, it may gain further ground on Amazon as the physical and ecommerce channels continue to integrate.If Amazon can't do better in grocery, Walmart has a huge opportunity to reclaim market share online.At the time of this writing, Ian Bezek held no positions in any of the aforementioned securities. You can reach him on Twitter at @irbezek. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy for Less Than Book * 7 Marijuana Stocks With Critical Levels to Watch * The 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond The post Walmart Is More of a Threat to Amazon Stock Than You Might Think appeared first on InvestorPlace.
Today, China released its trade data for June. China’s dollar-denominated exports fell 1.3%, while its imports in US dollar terms fell 7.3% last month.
Which stock would you rather own? iQiyi (NASDAQ:IQ) or Netflix (NASDAQ:NFLX)? It's an intriguing question, even if IQ stock and NFLX stock are far from perfect counterparts.Indeed, as I noted last year, the iQiyi business model is not the same as that of Netflix. iQiyi actually is more of a hybrid between Netflix -- which streams owned or licensed high-quality content to paying subscribers -- and Alphabet (NASDAQ:GOOG,GOOGL) unit YouTube -- which monetizes user and corporate content via advertising. 30% of iQiyi revenue in the first quarter came from advertising; the figure for Netflix is essentially zero.InvestorPlace - Stock Market News, Stock Advice & Trading TipsiQiyi's subscription fees are much lower, owing to its position in a still-developing market. Its reach is smaller. Competition is tougher, too. Tencent Video, from Tencent Holdings (OTCMKTS:TCEHY) and Alibaba (NYSE:BABA) unit Youku Toudu are running neck and neck in terms of paid subscribers and viewership. Hulu, now majority owned by Disney (NYSE:DIS), is Netflix's closest pure competitor, and remains a distant second, though rivals including Disney and AT&T (NYSE:T) are on the way. * 3 Forgotten Tech Stocks Worth Remembering That said, those differences seem incorporated into the two companies' stock prices, at least by one key valuation metric. Netflix (including its net debt) currently is valued at roughly $1,000 per subscriber. Hulu's implied valuation is about $600. For iQiyi, the figure is just $140.As imperfect as is the comparison between the two companies, the gap highlights a broader split in the market. The choice between IQ and NFLX comes down to an oft-asked question these days: would you rather invest in the U.S. and its Western allies or in China? The China-U.S. SplitThe split between iQiyi stock and Netflix stock isn't surprising -- or unique. U.S. companies generally get higher valuations. Amazon.com (NASDAQ:AMZN) has higher multiples than Alibaba or JD.com (NASDAQ:JD). Exxon Mobil (NYSE:XOM) gets a higher earnings multiple than PetroChina (NYSE:PTR). Even the Hong Kong-listed Chinese units of gaming giants Wynn Resorts (NASDAQ:WYNN) and Las Vegas Sands (NYSE:LVS) historically have traded at a discount, relative to the implied value of those companies' U.S. businesses.From one standpoint, that gap makes perfect sense. China, after all, remains a Communist country, at least in name. There are more risks with doing business in that country -- and in owning shares. Investors don't entirely trust the country's economic figures, with good reason. And there's long been a fear that China's roaring growth -- even if it's lower than reported figures suggest -- is going to come an end at some point.But on the other hand, those fears seem to undersell just what an opportunity China is. For a company like iQiyi, it's worth remembering that more than half of the country's households still don't have Internet access. There may be macro cycles like anywhere else, but there is also decades' worth of potential growth as hundreds of millions of Chinese move into the middle class over time.It's not unreasonable to prefer Chinese stocks to U.S. ones at this point. With the S&P 500 at all-time highs, there's obvious risk in U.S. stocks, too. The trade war creates near-term uncertainty, but will resolve at some point. It's possible the opportunity in Chinese stocks -- which mostly are cheaper than they were a year ago -- is greater than that of the U.S. IQ Stock Still the PlayFor investors bullish on China, iQiyi stock still looks like the best play, as I wrote last month. The gap in per-subscriber valuations between iQiyi, Hulu, and Netflix might make some sense at the moment, but iQiyi might have a larger opportunity over the long haul. It's not just China, either: iQiyi has started distributing in Malaysia, and like many Chinese firms has the potential to reach across all of Southeast Asia.IQ stock looks attractive particularly for those who see the relative valuations of U.S. stocks and Chinese stocks as lopsided. In the other cases, the Chinese stocks have potentially significant issues. Alibaba has a questionable VIE structure. The Macau casinos long have been linked to money laundering and other practices. * 10 Stocks to Sell for an Economic Slowdown iQiyi, on the other hand, is cheaper simply because it's a Chinese company. That logic might well be wrong. If it is, IQ stock will have enormous upside ahead.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell for an Economic Slowdown * 7 Marijuana Penny Stocks That I May Buy * 7 of The Best Schwab ETFs for Low Fees The post iQiyi Stock Highlights the China-U.S. Divide appeared first on InvestorPlace.
Portfolio Manager Danton Goei on how the trade war is contributing to a dislocation in some Chinese stocks, creating opportunities for value investors Continue reading...
(Bloomberg) -- Tesla Inc. and Apple Inc. both suspect they were betrayed by driverless technology engineers who defected to the same Chinese startup.So, Tesla is now asking for Apple’s help in a lawsuit in which the electric carmaker accused an engineer who worked on its Autopilot program of taking thousands of highly confidential files when he went to work for XMotors.ai, the U.S. research arm of Guangzhou-based Xpeng.Along with typical information demands in the early fact-finding phase of the lawsuit that are spelled out in a court filing last week -- Tesla wants to see the engineer’s emails and have a forensic analysis conducted on his electronic devices -- the company founded by Elon Musk disclosed that it has also served the iPhone maker with a subpoena.The documents Tesla seeks from Apple aren’t specified in the filing, but the thinking may be that while the Silicon Valley titans are rivals in the ultra-hot self-driving space, they share a common enemy in Xpeng.Last July, prosecutors charged a hardware engineer in Apple’s autonomous vehicle-development team with downloading proprietary files as he prepared to leave the company and start work for the for Chinese company. The engineer has pleaded not guilty.Apple didn’t immediately respond to a request for comment.The former Tesla engineer, Guangzhi Cao, acknowledged in a court filing that he downloaded copies of Tesla’s Autopilot-related source code to his personal iCloud account, but denies any wrongdoing.Cao “has done precisely nothing with Tesla’s IP,” having “diligently and earnestly” tried to scrub all of Tesla’s source code from his personal devices and volunteered to provide the company with complete forensic copies of any devices it wished to inspect, his lawyers wrote.Xpeng -- which hasn’t been accused of wrongdoing by Apple or Tesla -- has said it plays by the rules and has denied having any part in the engineers’ alleged misconduct. The company has said that when it was notified in June 2018 that U.S. authorities were investigating the Apple engineer, his computer and office equipment were secured and he was denied access to his work and subsequently fired.Xpeng, which is backed by Alibaba Group Holding Ltd. and Foxconn Technology Group, is among the startups in China striving to reshape the auto industry as the world’s biggest market promotes new-energy vehicles in an effort to clean its air and cut its reliance on oil imports.The Verge reported on the court filing earlier.\--With assistance from Mark Gurman.To contact the reporter on this story: Peter Blumberg in San Francisco at email@example.comTo contact the editors responsible for this story: David Glovin at firstname.lastname@example.org, Joe SchneiderFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
I do not own either Amazon (NASDAQ:AMZN) or Alibaba (NYSE:BABA), but if I had to choose, I would rather own BABA stock. Here are five reasons why Alibaba stock may be a better investment:Source: Shutterstock Alibaba Has Higher Revenue and Operating MarginsFirst, BABA has much better operating margins than AMZN does. Operating margins are one of the most important things to consider when making an investment. Operating margin is the amount of profit a company makes on a dollar of sales after paying its costs. * 10 Stocks to Sell for an Economic Slowdown According to marketwatch.com, AMZN has operating margins of 5.46% while BABA's operating margins are 15.90%. In other words, for each dollar of sales, BABA makes about 16 cents per share. For each dollar of sales, AMZN only makes about 5.5 cents per share.InvestorPlace - Stock Market News, Stock Advice & Trading TipsSecond, BABA is growing its revenues at a faster rate than AMZN is. In 2016, 2017, and 2018 AMZN had revenue growth rates of 27%, 31%, and 32% respectively. For the same time periods, the revenue growth of BABA was 29%, 48%, and 60%. The P/E Ratio of Alibaba Stock Is LowerThe third reason is that Alibaba stock has a lower price-earnings ratio. The PE ratio of a stock is the price of the share divided by the earnings per share. Historically, stocks with lower PE ratios have been considered a better value than stocks with high PE ratios. That is because stocks with lower PE ratios enable investors to pay a lower price for earnings. The current PE ratio of Alibaba is 48 while the PE ratio of AMZN is almost 100% higher, at 85. BABA Stock Has a Better Chart, Political EnvironmentFourth, Alibaba operates in a much friendlier domestic political climate than Amazon does. In China, sometimes it is hard to even distinguish between the government and the company. They are intertwined.That is not the case here in the United States. As we get closer to the presidential election, we will hear the Democrats say that AMZN is a monopoly and should be broken up. If it looks like the Democrats are going to win the election, Amazon stock will probably be pressured. Click to EnlargeThe fifth reason why I would rather own Alibaba stock is because AMZN is close to important resistance, while BABA is not. In this three-year chart of the two stocks, we can see that AMZN stock is facing important resistance around its current price. That is where Amazon stock peaked last September before dropping sharply. BABA stock seems to be better positioned to rally because it is further away from resistance than AMZN is.As of the time of this writing, Mark Putrino did not have any positions in the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell for an Economic Slowdown * 7 Marijuana Penny Stocks That I May Buy * 7 of The Best Schwab ETFs for Low Fees The post Alibaba Stock Is Probably a Better Investment Than Amazon Stock appeared first on InvestorPlace.
Since reaching nearly $200 in early May, Alibaba (NYSE:BABA) stock has come under pressure. But over the past few weeks, Alibaba stock has seen notable improvement.Source: Shutterstock The reason: There was a relaxation of tensions in the trade war between the U.S. and China. President Trump agreed to hold off on any new tariffs and he loosened restrictions on selling technology to Chinese powerhouse, Huawei.So there was good reason for a rally. In fact, for the year so far, the BABA stock price has risen about 24%. This is actually in-line with the kinds of returns for the past few years.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut of course, the main question now is: What's in store for Alibaba stock going forward? Well, besides the improvement with the trade situation, there are other major catalysts that should help with BABA stock. So let's take a look at three: China Ecommerce PowerhouseAs seen with Amazon (NASDAQ:AMZN) in the U.S., the dominance of the ecommerce market is a mega advantage. It allows for the collection of massive amounts of data and provides a platform for launching new services. * 7 of The Best Schwab ETFs for Low Fees And yes, when it comes to BABA, the company is essentially the Amazon of China … but with a much more profitable model. The company operates a high-margin digital marketplace that connects buyers and sellers.Keep in mind that the scale is enormous, dwarfing the U.S. market. BABA has 721 million mobile monthly active users (MAUs), up 104 million on a year-over-year basis.To get a sense of how large the opportunity, here's what BABA Executive Vice Chairman, Joseph Tsai, said during the fourth-quarter earnings call: "The middle class in China has reached critical mass of over 300 million, almost as large as the entire U.S. population. The middle class will double in the next 10 years, especially from the lesser developed Chinese cities. While total Chinese domestic consumption is $5.5 trillion today, consumption from these third-, fourth-, and fifth-tier cities, with a combined population of 500 million people, will triple from $2.3 trillion to nearly $7 trillion in the next 10 years."The company has also been aggressive in building on-demand services, such as for food delivery. Part of the strategy has been to partner with companies like Starbucks (NASDAQ:SBUX). Such efforts will certainly be a big help in providing more convenience and stronger connections with customers. Cloud And AIAgain, BABA has borrowed from the Amazon playbook by making an aggressive move into the cloud industry. This may actually turn out to be the biggest growth driver. In fact, BABA's cloud business is already the largest not only in China, but the whole Asia Pacific region.During the latest quarter, revenues in the segment spiked by 76% to $1.15 billion. To keep up the growth, BABA has been rapidly innovating the cloud platform by adding new services for blockchain, cybersecurity, database systems and AI.Note that BABA has also been leveraging these technologies across its own properties. For example, Tmall Genie is an AI-powered smart speaker. Then there is the Amap app, which is China's largest mobile provider of mapping, navigation and traffic information. Financials And ValuationThe valuation on BABA stock is fairly reasonable. Consider that the forward price-to-earnings multiple is 19X. By comparison, JD.com (NASDAQ:JD) trades at 29X - and is growing at a much slower pace. For example, BABA reported revenues that jumped a sizzling 51% to $13.9 billion during the latest quarter.And with the resources, BABA has been making smart investments. Perhaps the most significant is Alipay, which has become one of the largest payment networks in China along with Tencent's (OTCMKTS:TCEHY) WeChat.Tom Taulli is the author of the upcoming book, Artificial Intelligence Basics: A Non-Technical Introduction. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy on College Students' Radars * 7 Retail Stocks to Buy for the Second Half of 2019 * The S&P 500's 5 Best Highest-Yielding Dividend Stocks The post 3 Reasons Alibaba Stock Will Continue to Rise appeared first on InvestorPlace.
Alibaba (NYSE:BABA) closed on Wednesday at $166.93, slipping 1.11% on the day. That continues a downward trend for the past week, but investors shouldn't be overly concerned.Source: Shutterstock Since the start of June and into early July, Alibaba stock has been recovering from a miserable May. Even with yesterday's loss, BABA stock price is up nearly 11% compared to where it was May 31. * 10 Stocks to Sell for an Economic Slowdown There are more positives to look forward to over the next month or so, including an earnings report in August that's expected to deliver good news for Alibaba investors.InvestorPlace - Stock Market News, Stock Advice & Trading Tips May Was a Wretched Month for Alibaba StockAfter starting the month with modest growth, BABA stock slipped over the past week. Wednesday's 1.11% slide contributed to an overall drop nearing 5% compared to the $175.45 Alibaba stock closed at on July 2. However, this has been a minor setback compared to the 21% plunge investors faced through the month of May.At that point, tensions between the U.S. and China had escalated. The trade war between the countries was threatening to heat up with new rounds of tariffs. Online commerce is Alibaba's core business, and the fear that a full-blown trade war would hurt economic growth in China -- and therefore impact spending by Chinese consumers -- was a big concern. Nervous investors dumped BABA stock.Adding to the situation in May was fallout from the Verizon (NYSE:VZ) and Yahoo deal. On May 15, the fund created to hold Yahoo's Alibaba stock announced it would begin selling off those shares on May 20. The prospect of a flood of shares hitting the market only added to the BABA stock price downward spiral that month. Positives for Alibaba Stock and InvestorsWhile several factors combined to hit Alibaba stock hard in May -- knocking it back 21% in the month -- investors have seen more positives in the company since then and there should be more good news on the horizon.Midway through June, BABA stock got a boost following confirmation the company was filing for a listing on the Hong Kong stock market. The move will allow mainland Chinese investors to buy shares in the company, and it's expected it could put $20 billion in the company's coffers. Not quite as spectacular as Alibaba's record setting $25 billion IPO on the New York Stock Exchange, but enough to inspire investor confidence.In addition, the company will report earnings in August and it is expected that there will be positive news for investors. When the company last reported earnings in March, revenue was up 52% year-over-year, with both revenue and EPS significantly exceeding analyst expectations. In addition, the company's cloud computing unit saw 76% growth on the quarter and grew its share of the Asian market -- while Amazon's (NYSE:BABA) AWS lost ground in the region.Last August, Alibaba caught analysts off guard with a mixed earnings report that included 61% growth in revenue, but an earnings miss. As a result Alibaba stock dropped over 2%. This time around (BABA is expected to report earnings on August 22), analysts are looking for big revenue growth, continued strength in that cloud computing business and $1.13 EPS, compared to the $0.66 EPS the company delivered last August.So long as Alibaba hits those numbers in August and there are no sudden escalations in the trade war between the U.S. and China, there's a good chance that the BABA stock slide of the past week will turn out to be a blip. And Alibaba stock will continue to climb back toward the year-high $195 level it hit at the end of May.As of this writing, Brad Moon did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell for an Economic Slowdown * 7 Marijuana Penny Stocks That I May Buy * 7 of The Best Schwab ETFs for Low Fees The post Alibaba Stock Cools, but July's Loss Likely to Prove a Blip appeared first on InvestorPlace.
Chinese consumers aren’t cutting back on online spending, and that could indicate a strong second half of the year for e-commerce companies, KeyBanc Capital Markets analyst Hans Chung says.
Without question, Qualcomm (NASDAQ:QCOM) is one of the best performers so far this year. Since January's opening price, QCOM stock has skyrocketed 39%. And just as well, Qualcomm's rise in the markets reflects broader positive sentiment toward semiconductors. For instance, the sector-related exchange-traded fund iShares PHLX Semiconductor ETF (NASDAQ:SOXX) is up 30% year-to-date.But despite this good news, potential troubles are looming over the horizon. Last week and just before the Independence Day holiday, a federal judge ruled against Qualcomm in a paradigm-altering antitrust case. The semiconductor giant immediately appealed, but the process may take a more than a year to complete. Since the unfavorable ruling, Qualcomm stock has remained range bound.InvestorPlace - Stock Market News, Stock Advice & Trading TipsComplicating matters for QCOM is both rival and client Apple (NASDAQ:AAPL). For the consumer tech giant, many view these legal proceedings as a comeuppance. And under ordinary circumstances, Apple may have a case. Certainly, the Federal Trade Commission agrees with them. But in the time of Trump and the ongoing U.S.-China trade war, nothing is ordinary. Thus, it's difficult to make pronouncements on QCOM stock. * 7 Retail Stocks to Buy That Are Down in 2019 Why the difficulty? Primarily, antitrust concerns have expanded from being merely business matters into geopolitical ones. That is, penalizing QCOM for anticompetitive actions may benefit free markets, but at the expense of U.S. technological dominance. Not bringing this context into the mix ignores a critical component in assessing Qualcomm stock. Apple Has a Point about QCOM StockBefore we dive in, we should understand how QCOM stock got embroiled in a massive legal battle. For a detailed analysis, I highly recommend InvestorPlace contributor Vince Martin's longform breakdown. To summarize, Qualcomm has an extensive history of running afoul of international antitrust laws.By default, this shores up Apple's case because the facts demonstrate this isn't Qualcomm's first rodeo. Subsequently, Qualcomm stock looks shaky. To Martin's point, it's an element that prospective buyers shouldn't ignore.At the heart of Qualcomm versus Apple debate is the former's patent and licensing businesses. As a premium semiconductor provider, consumer tech firms like smartphone manufacturers highly value Qualcomm's critical chipsets. With the introduction of the 5G network, QCOM has even greater power due to its leadership in this next-generation market.Naturally, Qualcomm runs a very lucrative business licensing its core technologies. This revenue stream underlined the huge growth in QCOM stock over the years. However, Apple contends that Qualcomm is not playing fair with its double dipping.What exactly does that mean? In short, Apple claims that Qualcomm charges royalties on innovations that have nothing to do with the semiconductor firm. Essentially, QCOM is benefiting from two revenue streams from the same source: one for the initial license, and a second for royalties based on a company's own innovations using the original licensed technology. It's a nifty arrangement for Qualcomm stock.Moreover, the chipmaker gets away with it because if its clients won't play ball, Qualcomm won't provide the chips. If QCOM was a discount-bin organization, no one would care. But they own the best 5G technologies; therefore, this practice amounts to a monopoly.And if that monopoly goes away, QCOM stock is in big trouble. China Might "Rescue" Qualcomm StockBut before you hit the sell button on QCOM stock, you should know that the Qualcomm narrative has two components: one between Qualcomm and Apple, and the other between the U.S. and China.As a capitalistic organization, I expect Apple to raise hell: that's what they should do for their organization, their employees, and their shareholders. If I held stake in the company, I'd be disappointed if they didn't.But you must understand - as I alluded earlier - that antitrust accusations have absorbed geopolitical overtones. While I understand the FTC's point, and even the federal judge who ruled against Qualcomm, they're merely job-doers. What I mean is that they're assessing Qualcomm from the perspective of antitrust violations.Is QCOM guilty here? I'm not a legal expert, but they might be. However, that's not what truly hurts Qualcomm stock.Instead, Qualcomm is vital to our national security and our interests moving forward. As The Wall Street Journal's John D. McKinnon pointed out, Qualcomm has used the national security argument before. And it's no small matter. When the FTC first challenged the company's patent-royalty business, representatives from the defense and energy departments sat down with the regulatory agency.Obviously, the meetings didn't convince the FTC to drop its case against Qualcomm. However, the fact that the Department of Defense took an interest in this case tells you something.And that something is that China is lurking in the corner. More critically, they have no qualms about playing dirty to advance their nationalistic agenda. In addition, China's flagship companies like Huawei or Alibaba (NYSE:BABA) received unquestioned support from their government. * 10 Best Stocks for 2019: A Volatile First Half Here in the U.S.? We're about to prosecute one of our best and brightest. This terrible optic just might convince legal authorities to reverse course. Do the Ends Justify the Means?Without exaggeration or hyperbole, when you're dealing with QCOM stock, you're facing a philosophical question: do the ends justify the means?I may attract some heat for this opinion, but I think they do. Frankly, I don't understand what the point of upholding moral principles when our adversaries routinely break them. Due to this high-level trolling, at some point, China will beat us.And not only that, the FTC and other regulatory agencies are playing into China's hands. Again, China doesn't prosecute its companies for international trade and commerce infractions; the country encourages it!On a similar note, this is the reason why I think efforts to stymie big tech firms like Facebook (NASDAQ:FB) is naive. What most people I'd argue fail to realize is that we're in the middle of a tech cold war. While Apple has some grievances, let me be blunt: I'd rather America win this critical war and let Apple lose its battle with Qualcomm than the other way around.But will the ultimate arbiters see it this way? I just don't know. But I think the case is strong enough - again, please reference the DOD meeting with the FTC -- that investors shouldn't panic on QCOM stock.As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy on College Students' Radars * 7 Retail Stocks to Buy for the Second Half of 2019 * The S&P 500's 5 Best Highest-Yielding Dividend Stocks The post For Qualcomm Stock Investors, the Legal Battle is Much Bigger than Apple appeared first on InvestorPlace.