56.80 +1.43 (2.58%)
Pre-Market: 8:44AM EDT
|Bid||55.95 x 1200|
|Ask||58.71 x 4000|
|Day's Range||56.31 - 56.65|
|52 Week Range||50.45 - 65.25|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||1.48|
|Expense Ratio (net)||0.59%|
DEEP DIVE Billionaire investor Ray Dalio last week reminded investors what’s important about China: Its rapid and sustained economic growth is so important that it’s risky not to invest there. He also compared the scope of China’s rise to that of the British Empire and to the industrial revolution.
It has been a tough week recently for China-based stocks. And NIO (NYSE:NIO), a competitor to U.S.-based automaker Tesla (NASDAQ:TSLA), has undoubtedly been hard hit. After soaring past $10 earlier this year, Nio stock has since slumped to $3.17, in line with the bearish run on all China-based stocks.Source: Shutterstock In fact, Chinese stocks, as represented by the iShares MSCI China ETF (NASDAQ:MCHI) recently closed at $55 and the exchange-traded fund seems headed to its 52-week low of $50, after having topped $60 just last month.So should Nio stock investors be worried?InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe market has hammered all stocks related to China out of concerns of an upcoming trade war and accusations that China has manipulated its currency. No stock has been spared from the selloff.Alibaba (NYSE:BABA) is trading at $162, after having recovered from a steep fall to $152, yet it's still well off its 52-week high of $195. Baidu (NASDAQ:BIDU), now trading around $99, is just at its 52-week low after plummeting from $234 late last year.However, trade war or not, NIO will likely be a survivor and the headline damage could present real value if the Nio stock price gets much cheaper. Three Reasons NIO Stock Is a Long-Term Strategic BuyThe Trade War Will Most Heavily Hit Exporters to the U.S. … Not NIOThe phrase trade war with China is undoubtedly a frightening concept. Understandably, investors will dump any China-based stock. Yet, this is far from any outright war, but rather a readjustment of U.S. import tariffs that will hit China exporters. However, the bulk of NIO's market is in mainland China, one of the world's largest markets for electric vehicles (EV).No doubt, the trade war will weigh heavily on stock prices, and China will be hit. But the Chinese economy will likely remain rock solid. Last Thursday, China reported that its "exports rose 3.3% over a year earlier … rebounding from June's 1.3% contraction." Meanwhile, "[i]mports shrank 5.6% … an improvement over the previous month's 7.3% decline."The figures were mostly better than expected. In short, the Chinese export juggernaut will continue to steam forward. * 10 Medical Marijuana Stocks to Cure Your Portfolio Moreover, threats of a Chinese yuan devaluation and the global economic impact have already hit the market and are well baked into current prices. In most bad news related selloffs, stocks get hit hard at first and are usually oversold. Savvy value seeking investors then step in and bottom-fish for bargains. Similarly, NIO stock, after the sell off, may have been oversold by the market on the basis of an absolute worst case scenario.China Yuan Devaluation Could HelpCurrency devaluation is a two-edged sword. It will make Chinese exports cheaper and more competitive in the U.S. market. At the same time, U.S. exporters to China will have to hike their prices, thus cutting U.S. export sales. However, a devalued Chinese yuan will actually protect domestic Chinese manufacturers, such as NIO, in their home market.Tom Elliott, international investment strategist at Devere Group, a U.K.-based financial advisory firm, said a weaker yuan would increase cost-cutting pressure around the world's manufacturing industries:"Chinese goods, always competitive on price, will be even more competitive … This is therefore bad news for manufacturers outside of China, at a time when global manufacturing is struggling with weakening demand growth and the negative impact of the U.S.-China trade dispute on their supply lines and profits."Translation: A weaker yuan will hurt U.S.-based and non-Chinese manufactures the most. NIO, with 100% of operations inside China, is largely safe. So in the longer run, the Nio stock price might not be in as much trouble as some might think.An Out-of-the-Money, Long-Dated Option On a Hot MarketAt a rock bottom price below $3, NIO stock will be so undervalued as it will be akin to buying an out-of-the-money, long-dated call option. Such an option has zero intrinsic value, but potentially a huge upside if the underlying asset significantly appreciates. The EV market in China is just beginning to take off. EV sales will skyrocket in the next five years, mainly because it is much cheaper to operate an EV than a traditional gasoline-powered vehicle and there's a drive by the Chinese government to cut pollution.NIO commands the size, capacity, market share and evolving product line to make it ideally positioned to leverage the incredible growth of the Chinese EV market. Already, despite its ups and downs, as well as a recently disappointing earnings call, top-line revenues for NIO have increased over 400% from one year ago. * 7 S&P 500 Dividend Stocks to Buy With Yields of at Least 3% The NIO brand was recently ranked highest-quality in J.D. Power's inaugural China New Energy Vehicle Experience Index Study. NIO beat out several competitors, including second-ranked BMW (OTCMKTS:BMWYY). Two Chinese automakers -- Chery Automobiles' Chery and GAC Motors' Trumpchi, both state-owned -- tied for third place in the rankings.There will certainly be some tough weeks ahead for NIO stock as political rhetoric about a trade war with China continues to hammer the market. NIO will also see challenges as the Chinese government reduces subsidies on EV sales.But if Nio stock falls below the crucial $3 level, it will present an excellent opportunity for a long-term hold.As of this writing, Theodore Kim did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Large-Cap Stocks to Sell Right Now * 7 Stocks Under $7 to Invest in Now * 7 Marijuana Stocks With Critical Levels to Watch The post 3 Reasons Nio Stock Will Be a Trade War Survivor appeared first on InvestorPlace.
Hawkish Fed outlook and renewed trade tensions shook the market to start August. These inverse ETF areas could be on a tear in the near term.
Over the past year, Nio (NYSE:NIO) has become a closely followed stock among China's expanding luxury automotive shares. NIO stock went public in the U.S. as an American Depositary Receipt (ADR) in September 2018. At the time, it was touted as the Tesla (NASDAQ:TSLA) of China.Source: Shutterstock Actual fundamental comparison of the two car makers is not the focus of the article today. Yet, our readers may already know that the share prices of both companies have suffered a similar downtrend in 2019. Year-to-date, Nio, like Tesla, has not rewarded its shareholders and the stock is more that 45%. With the decline in price, many analysts have also become increasing concerned about Nio's prospects.Let's look at Nio stock's fundamentals so that long-term investors may make an informed decision as to whether August may offer a good entry point into NIO shares, which are currently trading around $3.30.InvestorPlace - Stock Market News, Stock Advice & Trading Tips How Nio Stock Makes MoneyThe Shanghai, China-based company develops, manufactures, and sells premium semi-autonomous electric vehicles (EVs) to luxury buyers in China. Nio is a young company that was founded in 2014. It currently has offices in China as well as the U.S., the U.K. and Germany.The initial backers of Nio included Baidu (NASDAQ:BIDU), Tencent (OTCMKTS:TCEHY) as well as Singapore's sovereign wealth fund, Temasek Holdings.The group first focused on research and development (R&D) activities. Then it went into mass manufacturing in March 2017. Its first volume-manufactured seven-seater SUV vehicle -- the ES8 -- was first sold in China in June 2018, with buyers comparing it to Tesla's Model X.At present, Nio sells exclusively in China. In addition to the ES8, the company has two other vehicles: the EP9 (two-seater sports car) and the ES6 (five-passenger SUV). * 7 Oversold Stocks To Buy Right Now Nio cars are equipped with a standalone artificial intelligence (AI) system called the NOMI. The company also offers various car charging and power solutions.Management has been working hard to make the Nio brand more than a car manufacturer, but rather a life-style concept. For example, its showrooms also feature members-only areas, Nio Houses, that serve as upscale social clubs. Nio aims to appeal to the changing demographics of the Chinese car buyers who are more tech-savvy and want more from the dealership experience.In addition, the group uses social media to actively engage with current and prospective customers. It also has an app with over 800,000 users as well as a virtual currency. Nio Q1 Results were far from ImpressiveNio failed to impress Wall Street when the company reported first-quarter 2019 results on May 28. The manufacturer's Q1 sales of $228.8 million halved from the Q4, slipping 54.6% sequentially. Its gross margin was -13.4%, compared with 0.4% in Q4 2018.Management's May 2019 monthly delivery update early last month also drove home the concerns for what the team called "the challenging macroeconomic and Chinese auto market backdrop."Source: McKinsey & CompanyFurthermore, Nio has recently had to recall 5,000 ES8 SUVs due to battery fires.And the group's near $600 million quarterly cash burn is not likely to decrease in the next quarter. The issue of cash is one of the most important questions haunting Nio's fundamental story. Many investors may also regard Nio stock's debt-to-equity ratio of about 3.7 as rather high.Although the car company is going through cash at an alarming rate, Nio posted a smaller-than-expected Q1 loss. Its net loss stood at $373 million versus what analysts had expected to be $472 million.On a final note that may excite investors, the ES6, which in effect is a smaller and cheaper version of the ES8, has begun delivery several weeks ago. Could this new vehicle also provide a much-needed sales spark for Nio in the coming months? Bottom Line on Nio StockOn Sept. 12, 2018, Nio stock went public at an opening price of $6. After reaching an all-time high of $13.80 within two days of its listing, the Nio stock price has been on the decline.I am in the camp that Nio stock's price weakness since the IPO is a clear reflection of investor sentiment and major fundamental worries, especially regarding a young company with unproven management completing a rather premature exchange listing in a third country, i.e., the U.S., where it sells no cars. * 7 Stocks to Buy With Over 20% Upside From Current Levels However, I do not expect that the major investors, such as Tencent, as well as the Chinese government will allow the company to go bust.Daily volatility of Nio stock is high. Any headline news regarding the U.S.-China trade wars as well as sales or other fundamental metrics from Tesla will likely affect the short-term price in Nio shares, too. (Yesterday's 5.5% drop is a good case in point …)In other words what is good for China or Tesla may also be good for Nio and vice versa.Potential investors may want to wait for the release of Nio's next quarterly results, expected at the end of August. As well, those who buy into Nio shares should be ready to hold them for several years.Current NIO investors may consider hedging their stock purchases with, for example, Nov. 15 ATM covered calls.Investors who are interested in buying into Chinese or clean energy companies, but do not want to commit all their capital to a single stock such as Nio may also consider investing in various exchange-traded funds (ETFs) with NIO as a holding, including iShares MSCI China ETF (NASDAQ:MCHI), Global X MSCI China Consumer Discretionary ETF (NYSEARCA:CHIQ) or Invesco WilderHill Clean Energy ETF (NYSEARCA:PBW).As of this writing, the author did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 A-Rated Stocks Under $10 * 8 Monthly Dividend Stocks to Buy for Consistent Income * 7 Disruptive Biotech Stocks to Buy for 2025 The post Should Investors Include Nio Stock in their Back-to-School Shopping? appeared first on InvestorPlace.
We take a look at some Chinese ETFs in the wake of increasing number of U.S. manufacturers relocating their production units to other Southeast Asian countries.
Despite the lingering uncertain outlook with trade disputes not yet settled, Chinese market and country-specific ETFs still offer opportunities for investors. “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,” Lewis Kaufman, a portfolio manager at Artisan Partners, the Artisan Developing World (ARTYX), told CNBC. It’s very difficult to access domestic demand through the vehicles we would wish to use in so many emerging-market countries,” Kaufman add.
Shares of Nio Inc. shot up 6.8% on heavy volume in premarket trading Wednesday, which puts them on track to match its longest win streak since going public 10 months ago, after the China-based electric car maker reported second-quarter deliveries that beat expectations. Trading volume topped 1.5 million shares, enough to make the stock the most actively traded ahead of the open. The company reported earlier second-quarter deliveries of 3,553 vehicles, above its previous guidance range of 2,800 to 3,200. Nio's shares have gained 44.7% over the previous six sessions, the best 6-day performance since it started trading on Sept. 12, 2018. A positive close Wednesday would mark the 7th-straight gain, which would match the record win streak over the 7-day stretch ending Feb. 1, in which the stock rose 20.6%. The stock has dropped 42.1% year to date through Tuesday, while the iShares MSCI China ETF has climbed 11.7% and the S&P 500 has gained 18.9%.
Alibaba (NYSE:BABA), the so-called Amazon.com (NASDAQ:AMZN) of China, always generates investor scrutiny. That's especially true at this juncture. After a meteoric rise in 2017 when Alibaba stock finally justified its premium, we're now at an impasse.Source: Shutterstock On one hand, the BABA stock price at nearly $169 represents a 23% swing from the beginning of this year. This is an impressive tally, considering that the 380-stock exchange-traded fund iShares MSCI China ETF (NYSEARCA:MCHI) is up less than 12% during the same period. Also, the SPDR S&P 500 ETF (NYSEARCA:SPY) has gained almost 19% in 2019.But on the other hand, Alibaba stock is almost dead-even with 2018's opening price. In other words, shares of the Chinese e-commerce giant haven't moved for over a year-and-a-half. Obviously, that's not the type of performance you want to see if you're a China bull.InvestorPlace - Stock Market News, Stock Advice & Trading TipsFor comparison sake, Amazon shares are up almost 27% YTD. Extended that period to the January 2018 opener and AMZN shows a 59% increase. * 7 Retail Stocks to Buy That Are Down in 2019 Will BABA stock match or even exceed this track record? Or will stakeholders regret holding on too tightly? Here are three pros and three cons to consider: Pro: Trade War Truce Potentially Benefits Alibaba StockUnless you've been living under a rock, you know that the U.S.-China trade war has weighed heavily on global markets. What appeared as a rapprochement between the top-two economies of the world last year deteriorated into a war of words.However, the recent G20 summit in Japan provided an opportunity for both sides to lay the groundwork for a deal. It was a highly anticipated and tense moment for President Donald Trump and his counterpart President Xi Jinping. Though the two administrations didn't disclose many substantive details, we at least have one critical agreement: both nations will delay escalating tariffs.Unsurprisingly, the BABA stock price responded positively to the developments. Since the beginning of June, shares gained more than 16%. This contrasts sharply with the month of May, when tensions flared and Alibaba shares hemorrhaged 21%.The implication is clear: strong U.S.-China relations equal a healthy Alibaba stock. Pro: Regulations? What Regulations?Invariably, whenever a discussion about Chinese stocks stirs, you'll eventually come across their government's notorious control mechanisms. Let's face it: China has an infamous record for censorship and for cracking down on elements their administration finds disagreeable. Under that environment, you might worry about the longer-term trajectory of the BABA stock price.However, for Alibaba and other Chinese consumer-tech firms, like JD.com (NASDAQ:JD), China offers a more agreeable marketplace. That's because so far, neither the Chinese government nor the general public have shown qualms about their push for products and services featuring artificial intelligence. For instance, facial recognition programs raise concerns about online privacy.These issues stymie American tech giants like Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) and Facebook (NASDAQ:FB). In comparison, Chinese companies have free reign to explore their innovations. Logically, this dynamic has favorable implications for Alibaba stock. Pro: BABA Stock Receives Flagship SupportOne of the things you should understand about Chinese stocks is that this segment is very political. Whereas American companies are largely driven by the profit motive, Chinese blue chips represent both profiteering and patriotism.What do I mean by this? China has very ambitious goals, such as their "Made in China 2025" initiative. If you keep up on geopolitical news, you'll realize that they're not satisfied with merely being big. They want to be the biggest and the baddest, essentially replacing the U.S. from its tech leadership role.This is the reason why the trade war is so heated. We're not just fighting for the here and now. Instead, we're looking decades down the road. As such, you can expect BABA stock to receive maximum support from the Chinese government. Con: Truce Is a "Show Me" NarrativeAlibaba stock may have popped following the G20 summit. Since then, however, shares have not impressed, moving sideways as if seeking more substantive news. I'm not surprised one bit.Quickly, the much-covered trade war truce transitioned into a "show me" narrative, and I can't blame the markets for it. Too many times, we've seen head-fakes in this arena. Late-last year, the global investment community anticipated an eventual trade deal. Instead, we got fiery social media posts from the executive office.Therefore, absent an actual deal, a cloud will hang over the BABA stock price. Because at any point, this unsteady relationship could rapidly soar. And if it does, we've already witnessed how much things can deteriorate. Con: U.S. Has a Credibility CrisisUnderstandably, many equity bulls have held out hope that the U.S. will eventually sign a lasting trade deal with China. Because we live in a globalized economy, we can't afford to think, let alone operate in isolation. And despite rhetoric to the contrary, the uncomfortable truth is that the U.S. and China need each other for growth.That said, the bear case against a trade deal is also very strong. The biggest problem affecting investments like Alibaba stock is that the U.S. has a credibility crisis. Currently, we have a worsening relationship with an increasingly belligerent Russia. We have potential flash-points in North Korea and Iran, despite the Trump administration exercising diplomatic caution. On top of that, our allies generally regard us as unstable.Under that context, President Trump can't afford to show weakness with China. Moreover, the U.S. must keep the Chinese government accountable for their unethical business practices and intellectual property theft. Otherwise, it signals to everyone else that it's open season on the U.S.But obviously, don't expect China to play nice on this issue. Con: Chinese Consumer Market Probably Worse Than You ThinkOne of the biggest headwinds facing Chinese stocks is that you don't really know what you're getting. China has always played fast and loose with their economic figures. Subsequently, more than a few analysts have raised questions about Alibaba's accounting practices. * 10 Stocks That Should Be Every Young Investor's First Choice Even BABA stock isn't what you think it is. As InvestorPlace contributor Will Healy and many others have brought up, BABA is actually a share in a Cayman Islands-based holding company. Generally speaking, though, stakeholders have ignored these warning signs because the China narrative is so remarkable.That could change in the coming years, and maybe a lot sooner than some experts anticipate. Early this year, The New York Times reported that Chinese consumer sentiment slipped noticeably. I really doubt that things changed in half a year: due to China owning the more dependent economy, this prolonged trade war hurts them more than it hurts us. Bottom Line on BABA StockI can appreciate why so many bulls love BABA stock. Essentially, China owns the world's largest market for anything of importance. To win in business means you must win in China. Naturally, Alibaba benefits from home-field advantage.However, the trade war represents a paradigm shift in how the U.S. and others approach this Asian juggernaut. In many ways, President Trump exposed the dirty underpinnings of Alibaba stock. And that's why I think investors should cool off on shares until at least the geopolitical headwind is gone.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 * 7 A-Rated Stocks to Buy for the Rest of 2019 * 7 Education Stocks to Buy for the Future of Academia * 5 Stocks to Buy as You Rebalance Your Portfolio The post 3 Pros, 3 Cons for Buying Alibaba Stock appeared first on InvestorPlace.
DouYu International Holdings Ltd. said Monday it has set terms of its initial public offering, in which the China-based game-centric live streaming platform could raise up to $628.95 million. The company said it will offer 44,924,730 American Depositary Receipts in the IPO, while selling stockholders will offer an additional 22,462,380 ADSs. The ADS are expected to price between $11.50 and $14.00 each, and are expected to list on the Nasdaq exchange under the ticker symbol "DOYU." Every 10 ADS will represent one ordinary share. The company said there will be 32,462,368 ordinary shares outstanding after the IPO, suggesting the company could be valued at up to $4.54 billion. the company reported a net loss of RMB876.3 million ($130.6 million) on revenue of RMB3.65 billion ($544.5 million) in 2018, after a loss of RMB612.9 million on revenue of RMB1.89 billion in 2017. The company is looking to go public at a time that the Renaissance IPO ETF has soared 37.5% year to date, while the iShares MSCI China ETF has gained 12.0% and the S&P 500 has rallied 18.6%.
Shares of Nio Inc. surged 5.1% toward a six-week high in afternoon trading Monday, putting them on track for a fifth straight gain. The gains in the China-based electric car maker's stock got a boost in the wake of better-than-expected deliveries data from Tesla Inc. , out early last week. Shares of Nio, referred to by some as the Tesla of China, have now rocketed 34.5% during its win streak, while Tesla's stock has gained 3.7% and the S&P 500 has edged up 0.1% over the same time. That would market the best 5-day performance by Nio's stock since it ran up 34.9% during the five-session stretch ended Feb. 26, 2019.
The U.S.-listed shares of Nio Inc. surged 4.5% in very active afternoon trading Friday, as the China-based electric vehicle maker continued to get a boost from Tesla Inc.'s better-than-expected deliveries data released earlier this week. Volume swelled to 24.5 million shares, enough to make it the most actively traded on the NYSE. The stock's rally extends the 11% surge on Wednesday, which came on the back of a 4.6% gain in Tesla's stock after the U.S.-based EV maker reported the deliveries data late Tuesday. Since Nio's stock started trading in the U.S. on Sept. 12, 2018, it has a +0.72 correlation coefficient with Tesla's stock compared with a correlation coefficient of -0.10 with the iShares MSCI China ETF , according to an analysis of FactSet data. A correlation coefficient of +1.00 indicates a perfect match. Nio's stock has tumbled 49% year to date, while Tesla shares have shed 29% and the S&P 500 has gained 19%.