In this article, we will look at the 5 best emerging market stocks to buy according to hedge funds. If you want to explore similar stocks, you can go to 13 Best Emerging Market Stocks to Buy According to Hedge Funds.

5. Baidu, Inc. (NASDAQ:BIDU)

Number of Hedge Fund Holders: 40

This April, Daiwa raised its price target on Baidu, Inc. (NASDAQ:BIDU) to $215 from $200 and reiterated a Buy rating on the shares. The stock is placed fifth among the best emerging market stocks to buy now. Shares of Baidu, Inc. (NASDAQ:BIDU) have surged 26.02% over the past 6 months, as of April 7.

On March 16, Baidu, Inc. (NASDAQ:BIDU) posted earnings for the fiscal fourth quarter of 2022. The company reported an EPS of $0.19 and outperformed EPS estimates by $0.10. The company generated a revenue of $2.43 billion and beat revenue consensus by $75.50 million.

At the close of the fourth quarter of 2022, 40 hedge funds were long Baidu, Inc. (NASDAQ:BIDU) and held positions worth $1.73 billion in the company. Of those, Ariel Investments was the leading stockholder in the company and disclosed a stake worth $326 million.

Horos Asset Management made the following comment about Baidu, Inc. (NASDAQ:BIDU) in its Q4 2022 investor letter:

“As I mentioned at the beginning of this quarterly letter, we took advantage of the meltdown in technology platforms to initiate new positions in companies in which we had already been shareholders in the past and whose valuation did not, until now, provide a sufficiently high margin of safety. Such is the case of PayPal and Baidu, Inc. (NASDAQ:BIDU).

In the case of Baidu, as many will know, it is known as the “Chinese Google”. The company has been the leading Internet search engine in the Asian country for years, which has given it a historically privileged position to monetize, through online advertising, a huge user base. However, the rise of two types of applications has called into question the sustainability of its business model. On the one hand, mobile social apps, such as ByteDance’s well-known TikTok, have emerged as a new model of online consumption, generating a new platform through which to monetize Internet users. On the other hand, even more disruptive in the long term, is the emergence of the so-called super apps: a sort of virtual Swiss Army knives that allow users to access many products and services without having to leave their interface at any time, making Baidu’s traditional search engine less attractive. In this field, Tencent (with its super app Weixin/WeChat), Alibaba (Alipay) and Meituan certainly stand out. These two factors have caused Baidu’s online advertising market share to drop from 17% in 2017 to less than 7% estimated for 2022.34 To this deterioration, we should add the collapse in market value of its stake in iQiyi (video platform controlled by Baidu) and its equity holdings such as Trip.com (hotel and flight platform) …” (Click here to read the full text)

4. Coupang, Inc. (NYSE:CPNG)

Number of Hedge Fund Holders: 49

Coupang, Inc. (NYSE:CPNG) is a leading South Korean e-commerce company. On February 28, the company announced earnings for the fourth quarter of fiscal 2022. The company reported an EPS of $0.06 and outperformed EPS estimates by $0.01.

On March 1, Morgan Stanley revised its price target on Coupang, Inc. (NYSE:CPNG) to $23 from $26 and reiterated an Overweight rating on the shares. Coupang, Inc. (NYSE:CPNG) is one of the best emerging market stocks to buy now.

At the end of Q4 2022, 49 hedge funds were bullish on Coupang, Inc. (NYSE:CPNG) and held positions worth $3.05 billion in the company. Of those, Maverick Capital was the top investor in the company and held a stake worth $1.1 billion.

3. JD.Com, Inc. (NASDAQ:JD)

Number of Hedge Fund Holders: 64

At the close of the fourth quarter of 2022, 64 hedge funds were long JD.Com, Inc. (NASDAQ:JD) and held collective stakes worth $3.51 billion in the company. Of those, Tiger Global Management LLC was the leading investor in the company and held a stake worth $1.22 billion.

On March 13, Barclays analyst Jiong Shao raised his price target on JD.com, Inc. (NASDAQ:JD) to $74 from $72 and maintained an Overweight rating on the shares. JD.Com, Inc. (NASDAQ:JD) is placed third on our list of the best emerging market stocks to buy now.

On March 9, JD.Com, Inc. (NASDAQ:JD) released earnings for the fiscal fourth quarter of 2022. The company reported an EPS of $0.69 and outperformed EPS expectations by $0.19. The company’s revenue for the quarter amounted to $42.43 billion.

2. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)

Number of Hedge Fund Holders: 86

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is one of the best emerging market stocks to buy now. As of April 7, the stock has returned 33.81% to investors over the past 6 months.

On March 29, KGI Securities resumed coverage of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) with an Outperform rating and a NT$603 price target.

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) was held by 86 hedge funds at the close of Q4 2022. These funds disclosed stakes worth $10.2 billion in the company. As of December 31, Lone Pine Capital is the most prominent stockholder in the company and has a stake worth $774 million.

Here is what Baron Funds had to say about Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its third-quarter 2022 investor letter:

“Semiconductor giant Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) detracted from performance due to the global macroeconomic slowdown and softening demand for consumer electronics. We retain conviction that Taiwan Semi’s technological leadership, pricing power, and exposure to secular growth markets, including high-performance computing, automotive, and IoT, will allow the company to deliver strong revenue growth over the next several years.”

1. Alibaba Group Holding Limited (NYSE:BABA)

Number of Hedge Fund Holders: 113

Alibaba Group Holding Limited (NYSE:BABA) is the best emerging market stock to buy now. 113 hedge funds disclosed having stakes in the company at the end of Q4 2022. The total value of these stakes amounted to $5.65 billion.

This April, HSBC analyst Charlene Liu raised her price target on Alibaba Group Holding Limited (NYSE:BABA) to $143 from $138 and maintained a Buy rating on the shares. As of April 7, the stock has gained 29.66% over the past 6 months.

As of December 31, Coatue Management is the largest shareholder in Alibaba Group Holding Limited (NYSE:BABA) and has a stake worth $440.5 million.

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