Below you can see the top 5 Chinese stocks among hedge funds. For a detailed discussion of why you should be investing in Chinese stocks and a more comprehensive list, please see 10 Best Chinese Stocks To Buy Now.
5. Baidu (NASDAQ: BIDU)
Number of hedge funds: 43
Total value of hedge fund holdings: $2.04 billion
You might have already heard of Baidu, the company called “the Chinese Google” by many. Just like its western alternative, Baidu provides internet, mapping, AI and search engine services.
Baidu has recently experienced a slight dip in hedge fund sentiment, losing 6 funds worth of investment. Currently it can be found on 43 hedge fun portfolios while this number in this year’s first quarter was 49. It’s worth mentioning that Jack Woodruff’s Candlestick Capital Management cut the biggest position of the 750 funds watched by Insider Monkey, comprising close to $39.5 million in stock.
GDS Investments talked about Baidu in its 2019 Q2 investor letter. Here is what they said:
“With China on the mind, we turn to Chinese internet search firm Baidu, Inc. (NASDAQ: BIDU). At a price of approximately $115.00 per share, the company’s stock is at a 6-year low after it reported its first ever publicly-traded quarterly loss.
Interestingly, that loss is largely attributable to one factor: the company’s higher-than-normal operating costs during the first quarter when Baidu served as the main sponsor of the 2019 CCTV Chinese New Year Gala. In terms of television viewership, that gala is something like producing ten Super Bowl-level events all at one time. In a win for the company, though, and despite the high costs it incurred, Baidu doubled its daily active users. That, of course, should lead to better top-line results in the future.
To the extent other factors influenced the unexpected weakness in Baidu’s bottom-line results we can point to the company’s 58% ownership in iQIYI, Inc. (NASDAQ: IQ), a Netflix-like on-demand video streaming service and 19% ownership of Ctrip (NASDAQ: CTRIP). Collectively these two holdings comprise roughly 30% of BIDU’s current market capitalization.
With clear leadership in search, video streaming, AI and autonomous vehicle technology, Baidu is one the best and cheapest ways to gain access to these emerging growth technologies. Though the YTD performance of this company is disappointing, we remain optimistic about its long-term prospects.”