‘The Next Amazon’: 5 Undervalued Ecommerce Stocks with Huge Upside

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

Number of Hedge Fund Holders: 75

JD.com, Inc. (NASDAQ: JD) is a China-based ecommerce operator and retail infrastructure provider. It is ranked third on our list of 10 undervalued ecommerce stocks with huge upside. According to Steven Fiorillo, a finance expert focused on growth portfolios, the company is the ‘Amazon of China’ and one of the best plays for the expanding Chinese economy. The expert underlined the explosive growth potential of the firm in coming years evidenced by the running of 1,000 warehouses and the recent shattering of the $100 billion revenue mark. 

On July 27, investment advisory Mizuho maintained a Buy rating on JD.com, Inc. (NASDAQ: JD) stock and affirmed that a crackdown in China on online education firms was unlikely to affect other sectors of the market. 

Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Tiger Global Management LLC  is a leading shareholder in the firm with 51.6 million shares worth more than $4.3 billion. 

In its Q1 2021 investor letter, Arisaig Partners, an asset management firm, highlighted a few stocks and JD.com, Inc. (NASDAQ: JD) was one of them. Here is what the fund said:

“Our largest holding as a firm, JD.com, we expect to grow earnings at an annualised rate of 30% over the next five years, implying it will trade on an EV / EBITDA of 7.5x at the end of this period. Is this a growth stock or a value stock? Does anyone care? Do these labels really matter?

For the Asia Fund, with a higher pre-existing allocation to our core FMCG holdings coming into the year, we took advantage of capital market volatility to further concentrate on our highest conviction names. JD.com has been the main destination for our limited reallocations as evidence continues to emerge supporting our thesis that the company has a strong right-to-win in the large and highly fragmented USD1.8th Chinese grocery market. We have also been encouraged by the fact that after years of persistence, the company is beginning to engage with us on ESG issues (we have specifically discussed data protection, climate change and the circular economy). ESG is now being considered at the board level, and specific sustainability reporting should follow in the coming months. Having long displayed a healthy obsession with customer service, we interpret these latest conversations as a sign that JD is beginning to develop a more sophisticated understanding of its impact on all stakeholders.”