|Bid||N/A x N/A|
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|Day's Range||44.81 - 45.29|
|52 Week Range||37.63 - 52.08|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||N/A|
|Expense Ratio (net)||N/A|
The ongoing trade war saga between the U.S. and China will resume in Washington on September after both sides entered into recent discussions. Investors who want to get in on the action with Chinese equities ...
A key battle line has been drawn and crossed at China's Alibaba Group (NYSE:BABA). And for technical-based investors it's time to enjoy the benefits of capitalism, courtesy of a long position in Alibaba stock. Let me explain.Source: Shutterstock Keeping the faith in Alibaba stock hasn't always been easy. And it probably goes without saying that investors need look no further than the ongoing trade war between the U.S. and China as a reason to question a long position in BABA stock. But respectfully, it's time to turn your attention elsewhere.The fact is Alibaba stock has and continues to best investors' concerns regarding the trade war. This past May's easy earnings beat, with its solid revenue and margin growth, was proof of that as InvestorPlace's Luke Lango recently noted.InvestorPlace - Stock Market News, Stock Advice & Trading TipsYet shares of Alibaba and a company many rightfully view as China's answer to Amazon (NASDAQ:AMZN) weren't exactly quick to react enthusiastically to the quarterly confessional. In fact, BABA stock went down hard in the report's aftermath. So, what went wrong? * 7 Oversold Stocks To Buy Right Now A still-pending G-20 summit back in June certainly played a part in putting a lid on Alibaba's earnings. BABA's announced capital raise of approximately $20 billion via a Hong Kong shares listing has also been a point of contention. Alibaba stock bears who've long shouted about what they see as the diversified tech giant's accounting shenanigans see the move as the latest evidence of financial trickery.Nevertheless, in the face of constant headline harassment, BABA stock has moved higher.Alibaba stock is up roughly 27% year-to-date. Not only does the performance dwarf the 14% return of Invesco China Technology ETF (NYSEARCA:CQQQ) -- where the shares are the second-biggest holding, at 9.49% of the 91-stock portfolio -- it's also leading the U.S. bellwether S&P 500 index's gain of around 20%.And guess what? BABA isn't finished. What's more, shares are in position right now to make your portfolio great again or even better with Alibaba stock in it. Alibaba Stock Weekly ChartThe week is starting off on a slightly pressured note for the markets and Alibaba stock. But the noise is offering investors an opportunity to buy shares on weakness within a much stronger-looking weekly chart poised for continued upside.This past week Alibaba stock decisively reaffirmed the bull case after powering back above its year-long corrective base's 50% retracement level and mostly matching pre-earnings price for a second time. In our technical determination, it's a key battle-line won by BABA bulls following June's confirmed higher low pattern which set the stage for a constructive uptrend to emerge. * 7 Stocks to Sell This Summer Earnings Season Investors interested in going long Alibaba could always wait for additional price confirmation. I get it, but I also favor owning shares right here. With BABA marginally past this hotly contested technical zone and stochastics looking supportive after a near bearish crossover, conditions are ripe for a rally to the early May pivot high of $195.72 within the base.With shares trading near $176 there's roughly $20 of upside in Alibaba stock before I'd recommend taking partial profits. This compares nicely to the discussed battle line around the $170 level which bulls have overcome for a second time and a price obviously well-suited for a stop-loss if required.Allowing for a bit of wiggle room, an exit beneath $169 means the initial reward potential on going long Alibaba stock is nearly three times as great as the risk. That's attractive of course. But in appreciating a large corrective base showing more and more evidence of the right stuff for even bigger longer-term success, BABA is looking even better for making your portfolio great again or simply better than otherwise.Disclosure: Investment accounts under Christopher Tyler's management do not currently own positions in any securities mentioned in this article. The information offered is based upon Christopher Tyler's observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Semiconductor Stocks to Buy for Your Inner Geek * 7 Stocks to Buy That Save You Money * 4 Stocks to Sell Now The post Why Alibaba Stock Makes Even More Sense to Buy Today appeared first on InvestorPlace.
Although the trade war between the U.S. and China has dragged on, shares of Chinese e-commerce juggernaut Alibaba (NYSE:BABA) have largely shrugged off those trade tensions in 2019. So far this year, Alibaba stock is up nearly 30%, versus a roughly 20% gain for the S&P 500 and an approximately 14% gain for the Invesco China Technology ETF (NYSEARCA:CQQQ).There are three main reasons for the outperformance of Alibaba stock in 2019. First, the consumer side of China's economy has shown signs of stabilizing and improving in 2019. Second, Alibaba's revenue growth trends have remained resilient (BABA generated 50%-plus revenue growth again last quarter). Third, its margin trends have improved sequentially for the past three quarters.Source: Shutterstock Those three factors have driven the huge outperformance of BABA stock through the first seven months of 2019.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Stocks to Sell This Summer Earnings Season For five major reasons, this outperformance will persist for the last five months of 2019, too. Those five big reasons are as follows: China's Consumer Economy Is in Rebound ModeAs goes China's consumer economy, so goes Alibaba, since Alibaba's main businesses focus on selling goods to hundreds of millions of Chinese shoppers. Fortunately for the owners of Alibaba stock, China's consumer economy has been on a steady upward trend in 2019.In the first quarter of 2019, overall retail sales in China rose 8.3%. In the second quarter, they climbed more than 8.5%, including a 9.8% gain in June, the highest retail sales growth rate China has recorded since January 2018. Further, and more importantly for BABA stock, China's online retail sales growth accelerated from 15.3% in the first quarter to 17.8% in the first half of 2019.The economic data indicates that China's consumer economy materially improved over the past three months , especially on the digital front. As a result, Alibaba is well-positioned to report healthy quarterly numbers at the end of August. Those good numbers should provide support for continued gains by BABA stock. Alibaba Is Adding New Revenue StreamsIt's no secret that Alibaba's core commerce business is slowing, mostly because the growth of China's online retail market is slowing as the market gets bigger and more mature.But Alibaba is now doing something to offset that trend. Specifically, much like Amazon (NASDAQ:AMZN) is doing in the United States, Alibaba is creating tangential businesses that will produce new revenue streams.At the moment,Alibaba is focusing on selling consumer data to merchants. That business has healthy, long-term potential. We are entering the era of data-driven decision making. Alibaba has an unparalleled amount of data on China's consumers. That data will only become more and more valuable as data-driven decision-making becomes more prevalent. As a result, Alibaba's data selling business is likely to grow rapidly for the next several years.But that is just the tip of the iceberg. There are so many things which Alibaba can and will do to generate new revenue streams. Specifically, BABA can emulate the new things that Amazon is doing in America, like digital advertising, cloud, pharmacy, and logistics. As all these new revenue streams come online over the next few quarters for BABA, Alibaba's overall revenue growth trajectory will stabilize, and BABA stock will trend higher. Alibaba Is Going GlobalTo help it further combat slowing core e-commerce growth in mainland China, Alibaba is finally going global.Up until now, Alibaba's marketplace has been open to U.S. buyers but closed to U.S. sellers. Thus, while U.S. consumers could buy stuff from Chinese merchants on Alibaba, U.S. merchants couldn't sell products to Chinese consumers on Alibaba.That's all changing now. Alibaba recently began letting Americans sell products on the platform. BABA is charging Americans $2,000 to sell products on BABA's website, but that fee won't meaningfully lower demand because this is a unique opportunity for small and medium American merchants to increase their global addressable market by several fold.Consequently, over the next several quarters, a flurry of U.S. merchants will flock to Alibaba, and this rush of new sellers will provide a sizable tailwind to its revenues in the second half of calendar 2019. Margins Will Continue to ImproveDeclining profit margins have been a big problem for Alibaba for the past several years. The company has been investing a tremendous amount in new growth initiatives. Those investments come with hefty costs, and those hefty costs have eroded BABA's margins.A few years ago, BABA had 40%-plus net profit margins. Today, its net profit margins on a trailing-12-month basis are below 25%.But this margin compression trend appears to be in the process of reversing course. In fiscal 2018. BABA's net profit margin was 29.6%, down more than 3.6 percentage points from fiscal 2017. In the second quarter of fiscal 2019, BABA's profit margin for the trailing 12 months declined just 2.4 percentage points versus the previous year. In Q3 and Q4, the positive trend continued.Thus, the company's margin compression trend has significantly and consistently moderated over the past several quarters. This trend should persist for the foreseeable future.Alibaba's investments are finally starting to wind down, and the company's nascent hyper-growth businesses (like the cloud) are starting to grow meaningfully. They will continue to scale over the net few quarters, and that growth has the potential to raise the company's margins further, boosting Alibaba stock. Alibaba Stock Remains Attractively ValuedLast, but not least, Alibaba stock remains attractively valued.Relative to its history, Alibaba stock is pretty cheap at this point. Over the past five years, BABA stock's average forward earnings multiple has hovered around 29. Today, the forward earnings multiple sits around 26. Its sales, cash flow, and EBITDA multiples are also below their historical averages.Relative to its growth potential, Alibaba stock is also pretty cheap. According to YCharts, analysts, on average, expect Alibaba's long-term earnings growth to be roughly 22%. That seems conservative. My calculations indicate that the company's earnings growth rate will be closer to 25% over the long-term.Nonetheless, trading at 26 times its forward earnings, BABA stock has a price-earnings/growth (PEG) ratio of narrowly above one, which is really good in this market (the S&P 500 trades at a PEG ratio north of 1.2).Indeed, my calculations indicate that Alibaba stock's fundamentals will enable it to climb to $200 over the next few quarters. The Bottom Line on BABA StockAlthough the U.S.-China trade war has dragged on in 2019, BABA stock has shrugged off that noise, climbing 30% this year, thanks to increasingly favorable and improving core fundamentals. Those core fundamentals will continue to improve in the back half of 2019. As they do, BABA stock will continue to trend towards $200.As of this writing, Luke Lango was long BABA and AMZN. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 5G Stocks to Connect Your Portfolio To * 7 Stocks to Sell This Summer Earnings Season * 6 Upcoming IPOs for July The post 5 Reasons Alibaba Stock Could Rally Into the End of 2019 appeared first on InvestorPlace.
In two weeks, China will debut its Nasdaq-inspired board for technology companies developed domestically, which could put Chinese technology exchange-traded funds (ETFs) in play. U.S.-China trade negotiations may appear to be at a standstill, but that doesn't mean investors should sour their taste for Chinese equities, according to Lewis Kaufman, a portfolio manager at Artisan Partners. U.S. President Donald Trump and Chinese President Xi Jinping recently met at the G-20 summit in Japan, agreeing to hold back on further tariffs until the two largest economies can iron out a trade deal.
U.S.-China trade negotiations may appear to be at a standstill, but that doesn't mean investors should sour their taste for Chinese equities, according to Lewis Kaufman, a portfolio manager at Artisan Partners. “Regardless of what ultimately happens with the China trade tensions, there is a robustness to China that doesn’t exist anywhere else in the emerging markets,” said Kaufman. It’s very difficult to access domestic demand through the vehicles we would wish to use in so many emerging-market countries,” Kaufman added.
The topic of technology has been a point of contention as the U.S.-China trade war rages on, but the world's second largest economy isn't content with just sitting on its laurels while the tariff battle plays out. In fact, global management consultancy Bain & Company says China is making "tremendous" progress with respect to its technology sector. Over the weekend at the G-20 summit in Japan, U.S. President Donald Trump said he could reverse restrictions that prevent American companies from selling their products to Chinese technology giant Huawei as part of a trade agreement.
Despite the slide, the outlook for the sector is quite promising. This is especially true as S&P 500 Technology Sector Index has clearly outpaced the S&P 500 Index from the year-to-date look.
Per a Bloomberg report, U.S.-China trade deal negotiations now include the addition of a cloud computing concession that would allow foreign companies to access the $12 billion Chinese market–a boon for ...
ATLANTA , March 11, 2019 /PRNewswire/ -- Invesco Ltd. (NYSE: IVZ) today announced it will change the fund names, underlying indexes and tickers for certain funds in its ETF product line as part of its ...
Chinese markets have rebounded as trade talks between Washington and Beijing progress, and among the top performers, China technology-related ETFs stood out. For example, the Global X MSCI China Information ...
Emerging markets stocks and exchange-traded funds (ETFs) struggled through a miserable 2018 as the MSCI Emerging Markets Index lost more than 15% on the year. Chinese ETFs were among the most egregious offenders. Last year, the iShares China Large Cap ETF (NYSEARCA:FXI) and the iShares MSCI China ETF (NASDAQ:MCHI), two of the largest Chinese ETFs trading in the U.S., lost 13.3% and 19.8%, respectively. Still, there are hopes that moves by the Chinese central bank coupled with the potential for headway on the U.S.-China trade spat could spur Chinese ETFs over the near-term. "From a stock market perspective, with a lot of negative news already priced in, we could realistically hope that the absence of further negatives may at least lead to some stabilisation in equity prices," Colin Morton, a portfolio manager at Franklin Templeton Investments, told the Financial Times. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Currently, trade teams from the U.S. and China are meeting in Beijing and there is optimism those talks could result in a credible trade truce, which could spark a rally in Chinese ETFs. "A potential deal would likely involve a sharp increase in Chinese purchases of American soybeans and liquefied natural gas," reports the Washington Post. * 10 Oversold Stocks Due for a Bounce However, if trade talks falter, the following Chinese ETFs merit caution over the near-term. ### Invesco China Technology ETF (CQQQ) Expense Ratio: 0.70% per year, or $70 annually per $10,000 invested Funds focusing on China's fast-growing internet and technology sectors overshot the 2018 losses of traditional Chinese ETFs significantly. Just look at the Invesco China Technology ETF (NYSEARCA:CQQQ), which tumbled more than 35% last year. CQQQ, which tracks the AlphaShares China Technology Index, is indeed a tempting bet for investors looking to buy the dip in Chinese ETFs. Prior instances of Chinese internet stocks outperforming their U.S. counterparts only add to the allure of CQQQ and rival Chinese internet funds. Home to 74 stocks, CQQQ features exposure to just three sectors: communication services, consumer discretionary and technology. In other words, this Chinese ETF is a growth fund and investors need to renew their enthusiasm for growth fare, U.S. and Chinese stocks alike, before CQQQ can rebound from its 2018 doldrums. ### Invesco China Small Cap ETF (HAO) Expense Ratio: 0.75% In the U.S., small-cap stocks were stars through the first three quarters of 2018, but ex-U.S. small caps scuffled for most of the year. Later in the year, domestic small caps faltered before large-cap fare, pressuring international rivals along the way. Over the past 90 days, the Invesco China Small Cap ETF (NYSEARCA:HAO) has performed less poorly than the U.S.-focused Russell 2000 Index. However, investors should not be deceived by that point, Over the past year, HAO is lower by 26.4% while the Russell 2000 is lower by less than 10%. * 7 Small-Cap Stocks With Big Growth Potential In 2019 While China is far from entering a recession, economic growth there is slowing a bit and that scenario is likely to strain smaller stocks more than large-cap names. That could make betting on HAO and other small-cap Chinese ETFs difficult given the elevated volatility that comes with international small caps. Over the past three years, HAO's annualized volatility is about 400 basis points higher than the Russell 2000's. ### Global X MSCI China Consumer Discretionary ETF (CHIQ) Expense Ratio: 0.65% There is undoubtedly a compelling long-term case for tapping the Chinese consumer, a theme that's accessible via Chinese ETFs such as the Global X MSCI China Consumer Discretionary ETF (NYSEARCA:CHIQ). As is the case in the U.S., consumer discretionary stocks are cyclical in China and likely to overshoot broader market losses when stocks decline. That was the case for CHIQ in 2018 as this Chinese ETF tumbled 28.7%. This Chinese ETF is heavily dependent on internet stocks, a corner of the Chinese equity market that was savagely repudiated last year. For example, Alibaba (NYSE:BABA) and JD.com Inc. (NASDAQ:JD) combine for about 15.8% of CHIQ's weight. Some recent data points outline the near-term risks associated with consumer-oriented Chinese ETFs. "A decrease in Chinese car sales is one key data point that has been misconstrued, China experts say," reports NBC News. "Automotive consulting firm ZoZoGo found that car sales in China reversed course last year and fell by 3 percent after roughly two decades of growth, and the country's largest automotive trade group also has reported sinking sales figures in recent months." ### Reality Shares Nasdaq NexGen Economy China ETF (BCNA) Expense Ratio: 0.78% The Reality Shares Nasdaq NexGen Economy China ETF (NASDAQ:BCNA) is one of the newer members of the Chinese ETFs fray, having debuted in June 2018. BCNA targets the Reality Shares Nasdaq Blockchain China Index, which is "designed to measure the returns of companies in China that are committing material resources to developing, researching, supporting, innovating or utilizing blockchain technology for their use or for use by others," according to Reality Shares. While blockchain has myriad applications throughout the technology universe and other industries, investors still often associate blockchain as being intimately linked to the crypto currency space. That is a plus for Chinese ETF like BCNA when cryptocurrencies are rallying, but the opposite was true last year when bitcoin lost 80% of its value. * The 7 Best Stocks in the Entrepreneur Index As a result of weakness in the cryptocurrency market, BCNA is off to an inauspicious start, having shed more than 13% since inception. ### Franklin FTSE China ETF (FLCH) Expense Ratio: 0.19% With its annual fee of just 0.19%, the Franklin FTSE China ETF (NYSEARCA:FLCH) is one of the cheapest Chinese ETFs on the market. While investors love a good deal on ETF fees, cheap ETFs rise and fall, just like their high-fee counterparts. FLCH proves as much. Low fee or not, this Chinese ETF is down more than 22% over the past year. This fund is a broad market play on China that holds 274 stocks with a weighted average market capitalization of $157.8 billion. FLCH allocates about 52% of its combined weight to communication services and financial services stocks, while the consumer discretionary and industrial sectors combine for almost 26% of the fund's weight. Reflecting the state of affairs with Chinese stocks, FLCH has a low price-to-earnings ratio of just 10.86, but neither that trait nor its low fee insulate this fund from further declines in Chinese stocks. ### Invesco Golden Dragon China ETF (PGJ) Expense Ratio: 0.70% The Invesco Golden Dragon China ETF (NASDAQ:PGJ) is one of the oldest Chinese ETFs in the U.S., having recently celebrated its 15th birthday. Relative to other broad market Chinese ETFs, PGJ has a small lineup of just 64 stocks. A small number of stocks in an ETF can expose investors to concentration risk at the sector and individual holdings levels. That is a consideration with this Chinese ETF as just two sectors -- communication services and consumer discretionary -- combine for over 83% of PGJ's weight. Plus, the fund's top three holdings combine for over a quarter of its weight. * 10 Stocks to Pull From the Bear Market Bargain Bin PGJ needs those sectors to rebound because when those groups falter, this Chinese ETF suffers as highlighted by a 2018 decline of 29.5%. ### SPDR S&P China ETF (GXC) Expense Ratio: 0.59% The SPDR S&P China ETF (NYSEARCA:GXC) is a basic broad market Chinese ETF that has one of the largest rosters -- nearly 360 stocks -- among the Chinese ETFs highlighted here. GXC components are "publicly listed companies with a float-adjusted market cap of $100M and at least $50M in annual trading volume are included in the Index," according to State Street. As is the case with the aforementioned PGJ, there are elements of concentration risk with GXC. The ETF's top two holdings -- Tencent Holdings Ltd. (OTCMKTS:TCEHY) and Alibaba -- combine for over a quarter of the fund's weight. Three sectors -- communication services, financial services and consumer cyclicals -- combine for two-thirds of GXC's roster, indicating a lot needs to go right for this Chinese ETF to rebound from its 2018 loss of 19.4%. As of this writing, Todd Shriber did not hold a position in any of the aforementioned securities. ### More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks to Buy Down 20% in December * 5 Chinese Stocks to Avoid Now (But Buy Later) * 3 Big Gainers That Easily Could Be the Best Stocks to Buy Compare Brokers The post 7 High-Risk Chinese ETFs to Avoid … For Now appeared first on InvestorPlace.
China-related exchange traded funds climb after Beijing announced a new round of economic stimulus measures ahead of trade talks with Washington D.C. Among China-related ETFs, technology-heavy strategies were leading the charge Friday, with the Invesco Golden Dragon China ETF (PGJ) up 6.4%, KraneShares CSI China Internet Fund (KWEB) 6.2% higher and Invesco China Technology ETF (CQQQ) up 5.4%. Chinese premier Li Keqiang urged banks to increase lending to the private sector while the People’s Bank of China cut a key reserve ratio to encourage lending from commercial banks, the Financial Times reports.
Over the past several months, investors have thrown Chinese stocks in the garbage pile, and they haven’t once second guessed it. Since then, it has dropped more than 30%, indicative of what has been a broad and relentless selloff in Chinese stocks. After all, the long-term fundamentals underlying many of these big growth Chinese tech names still remain very strong.
The PowerShares QQQ (QQQ) , which tracks the tech-heavy Nasdaq-100 Index, is up more than 18% year-to-date. Stocks such as Apple (AAPL), Google parent Alphabet Inc. (GOOG), Facebook Inc. (FB) and Microsoft Corp. (MSFT) are pivotal to QQQ’s performance. Conversely, small-cap tech stocks are actually lagging broader benchmarks such as the Russell 2000 Index and the S&P SmallCap 600 Index.