There is a wide range of stock selection methods retail investors can use to select good stocks, or at least avoid bad stocks. Highly-scrutinized television personality Jim Cramer recommends investors look at the new-high list, which includes stocks that reach their highest price in the past 52 weeks. This stock selection method seems to be quite good, considering that stocks included in that list are there for good reason. Nonetheless, this strategy is more appropriate for short term-oriented investors. There is a different approach that allows long-term-oriented investors to find high-potential stocks. This method involves looking at the basket of stocks that attracts the most attention from top hedge fund vehicles. These stocks receive attention from the hedge fund industry for good reason, and historical data shows that it pays off to closely examine this group of stocks (see more details here). Ctrip.com International Ltd. (ADR) (NASDAQ:CTRP) is one of those stocks and this article will discuss the recent hedge fund sentiment towards it.
Is Ctrip.com International Ltd. (ADR) (NASDAQ:CTRP) undervalued? It appears so, as the smart money is betting heavily on the stock. The number of bullish hedge fund bets advanced by 18 recently. CTRP was in 61 hedge funds’ portfolios at the end of the fourth quarter of 2015. There were 43 hedge funds in our database with CTRP holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Ingersoll-Rand PLC (NYSE:IR), First Data Corp (NYSE:FDC), and Spectra Energy Partners, LP (NYSE:SEP) to gather more data points.
Ctrip.com International Ltd. (ADR) (NASDAQ:CTRP) is a travel service provider of hotel accommodations, transportation ticketing, packaged tours and corporate travel management in China. The American Depositary Receipts (ADRs) of Ctrip.com have advanced by 73% over the past 12 months despite losing 16% since the beginning of 2016. The company primarily derives its revenue from commissions associated with accommodation reservations and transportation ticketing. Ctrip.com International generated revenue of RMB8.46 billion, or $1.33 billion, during the nine months that ended September 30, which was up by 47% year-over-year. The company’s revenue from its accommodation reservation business, which accounted for approximately 41% of total revenue, increased by 45% year-over-year to RMB3.43 billion, or $539.59 million. At the same time, transportation reservation revenue, which represented 38% of total revenue, grew by 47% year-over-year to RMB3.21 billion, or $504.98 million. Ctrip.com International Ltd. (ADR) (NASDAQ:CTRP) will release its fourth-quarter earnings report on March 16, so worldwide investors will soon get the chance to evaluate the impact of the softening Chinese economy on the company’s financial performance during the holiday quarter.
Just recently, a JPMorgan analyst revealed his top picks in the Chinese Internet sector, one of which was Ctrip.com International Ltd. (ADR) (NASDAQ:CTRP). The analyst believes that Ctrip.com’s long-term growth prospects are intact despite facing short-term macroeconomic challenges. The analyst has an ‘Overweight’ rating on Ctrip.com International and a price target of $50 on the stock, representing upside of about 28%. More importantly, the analyst believes that the company will witness strong margin improvement in the upcoming year.
Keeping this in mind, let’s check out the latest hedge fund activity surrounding Ctrip.com International Ltd. (ADR) (NASDAQ:CTRP).