After Slump In Chinese Equities, These Are Five Stocks You Should Consider For Your Portfolio

#2 Alibaba Group Holding Ltd (NYSE:BABA)

– Investors with Long Positions (as of December 31): 77

– Aggregate Value of Investors’ Holdings (as of December 31): $6.74 billion

Although 2015 wasn’t a great year for Alibaba Group Holding Ltd (NYSE:BABA), it ended the fourth quarter on a positive note. During that period, its stock appreciated by 38%, its ownership among funds covered by us increased by 17 and the aggregate value of their holdings in it jumped by 78%. Jim Davidson, Dave Roux and Glenn Hutchins‘ Silver Lake Partners initiated a large stake in the company by purchasing 24.46 million shares during the fourth quarter and became its largest shareholder among the funds covered by us at the end of December. In the first few weeks of 2016, Alibaba Group Holding Ltd (NYSE:BABA) gave up almost all its fourth quarter gains, but it has recovered since then and now trades down by only 6% year-to-date. A lot of analysts feel that Alibaba Group Holding Ltd (NYSE:BABA)’s is undervalued, trading at a trailing P/E of 18.58, when one takes into account the phenomenal pace at which the company is growing. Earlier in March, the company announced that it has crossed 3 trillion RMB ($463 billion) GMV (Gross Merchandise Volume) mark for this fiscal year and is targeting $6 billion in GMV in 2020.

#1 JD.Com Inc (ADR) (NASDAQ:JD)

– Investors with Long Positions (as of December 31): 78

– Aggregate Value of Investors’ Holdings (as of December 31): $10.84 billion

JD.Com Inc (ADR) (NASDAQ:JD) was the most popular Chinese stock among the funds tracked by us going into 2016. During the fourth quarter, investors with long positions in the stock increased by seven and the aggregate value of their holding in it swelled by almost $1 billion. Though the company has lost almost 20% of its market capitalization so far this year and its shares have gone nowhere in the past two years,  analysts and investors remain confident about its long-term prospects. In January, the company announced that its internet finance arm has raised $1.01 billion from a consortium of investors including Sequoia Capital China. According to leading analysts, the internet finance arm of the company can give it a significant leverage over other Chinese e-commerce players in the times to come. On March 1, JD.Com Inc (ADR) (NASDAQ:JD) reported its fourth quarter earnings, beating analysts’ projections of a per share loss of $0.12 on revenue of $51.90 billion by declaring a per share loss of $0.07 on revenue of $54.60 billion. The stock currently sports an average rating of ‘Overweight’ and an average price target of $36.10 from the 32 prominent analysts and brokerages who cover it.

Disclosure: None