American Depositary Receipt (ADR) is a certificate issued by a U.S. bank that represents a specified number of shares of a foreign stock that is traded on a U.S. stock exchange. These receipts were introduced to reduce the expenses associated with listing a foreign stock on a U.S. exchange and to help investors manage their foreign investments in U.S. dollars. In this article we’ll take a look at some of the most popular ADRs among top hedge funds.
An everyday investor doesn’t have the same resources and capabilities to analyze different publicly-traded companies as hedge funds do. This is why it is a good idea to see what stocks hedge funds like the most and try to imitate some of their bullish moves in an attempt to reap market-beating returns. At Insider Monkey, we follow the activity of several hundred of the best-performing hedge funds as part of our strategy. We analyze their 13F filings and use the data to see what stocks they are collectively bullish on. Through extensive research, we have determined that the best approach to outperform the broader indices is to follow hedge funds into their top small-cap ideas (see more details here).
At the end of the 2015, roughly 39% of JD.Com Inc (ADR) (NASDAQ:JD) common stock was held by 78 elite hedge funds from our database, up from 71 a quarter earlier. Tiger cub Chase Coleman is bullish on this stock and his fund, Tiger Global Management, held 59.6 million shares of JD.Com Inc (ADR) (NASDAQ:JD) at the end of December, its third-largest position, worth roughly $1.92 billion. Stephen Mandel‘s Lone Pine Capital, on the other hand, chose to distance from the stock and has reduced its holding by 38% to 26.9 million shares. JD.Com Inc (ADR) (NASDAQ:JD) has been slowly closing the gap on Alibaba Group Holding Ltd (NYSE:BABA) in their battle for the Chinese online shopping market. However, that came at a cost and, with expenses continuing to pile up, analysts have recently reduced their earnings estimates. According to a report by Bloomberg, analysts’ average profit forecast for 2016 has dropped to $0.34 per share from previous estimates of $0.78 per share.