5 Top Chinese Companies on NASDAQ

1. Baidu, Inc. (NASDAQ: BIDU)

Number of Hedge Fund Holders: 89     

Baidu, Inc. (NASDAQ: BIDU) is one of the largest technology corporations in the world and is known as the ‘Google of China’ as it operates the most popular internet-based search engine in the Asian country. Like other mega tech firms, Baidu, Inc. (NASDAQ: BIDU) has diversified business beyond the core internet service to artificial intelligence, cloud computing, and internet streaming services. The company is placed first on our list of top Chinese companies on NASDAQ.

Baidu, Inc. (NASDAQ: BIDU) stock was upgraded to Buy from Hold by investment advisory Loop Capital Markets in late March on the back of the company’s entry into the autonomous vehicles market. The company’s shares have returned more than 52% to investors over the past year. 

At the end of the first quarter of 2021, 89 hedge funds in the database of Insider Monkey held stakes worth $6.5 billion in Baidu, Inc. (NASDAQ: BIDU), up from 51 in the preceding quarter worth $4.6 billion.

In its Q1 2021 investor letter, Horos Asset Management, an asset management firm, highlighted a few stocks and Baidu, Inc. (NASDAQ: BIDU) was one of them. Here is what the fund said:

“We have also fully exited our stake in Baidu, following their outstanding performance during the period and their lower relative upside potential compared to other investment alternatives, which we will discuss below.

The Chinese technology platform company Baidu has also been held in the portfolios managed by Alejandro, Miguel and myself for several years. During this period, we have seen very high volatility in its share price, which we have taken advantage of to make significant rebalancing moves in our position (in fact, we even sold our entire position once, when we thought the stock’s upside potential was exhausted). After several years of instability, market sentiment turned very positive, putting an end to the historical advertising problems in the healthcare sector, the divestments in O2O (Online-to-Offline) businesses that continued to weigh on the company’s margins, the IPO of part of the iQiyi streaming business (which hid Baidu’s underlying cash generation capacity) and the tough competition from other industry giants such as Tencent and Alibaba, as well as the entry of new players with disruptive business models (ByteDance). At the same time, the company’s recent commitment to electric vehicles contributed even more to this change of narrative. Baidu’s share price rose almost fourfold from the March 2020 lows to all-time highs and reached a valuation where the margin of safety, in our view, was too narrow.”

You can also take a peek at Billionaire Stan Druckenmiller’s Top 10 Stock Picks and Billionaire Julian Robertson On Interest Rates and His Top Stock Picks For 2021.

Follow Insider Monkey on Twitter