Billionaire investor and hedge fund manager David Tepper is betting on China despite the ongoing threat of tariffs from the Trump Administration. The president and founder of Appaloosa Management has significantly increased holdings in Chinese-related stocks and ETFs following a promise in September to buy “everything” China.
By the end of December, Tepper’s portfolio was made up of about 37% China-related assets. Looking to get in on the action? These five Tepper-approved investments help you add exposure to the Chinese market to your portfolio while also trading exclusively on the NYSE and NASDAQ exchanges.
Big Buy Ratings for Alibaba
First up on Tepper’s China shopping spree is e-commerce powerhouse Alibaba Group Holding Limited (NYSE: BABA). Tepper has recently increased holdings of BABA by 18% following a stunning November earnings report, in which the company posted an actual EPS of $15.06 per share, beating expert estimates of $1.87 per share.
After reporting an EPS value more than 700% higher than what experts expected, it’s easy to see why analyst sentiment is shifting on BABA. The company maintains a Moderate Buy rating that slightly edges out e-commerce industry averages, combined with a one-year return of more than 54%. BABA is also a strong choice for stable dividends, with a payout ratio of 19.88% and an annual yield of 0.83%.
JD.com Sees Appaloosa Holdings Increase By 40%
The most significant percentage change in Tepper’s China-related portfolio came from JD.com, Inc. (NASDAQ: JD) shares, with Appaloosa increasing its holdings by 43%. Another e-commerce company with a Moderate Buy rating from experts, the average expert price target is $41.36 per share, representing a potential upside of 5.21%.
JD.com boasts a solid EPS of $9.36 per share, beating its most recent consensus EPS by more than $8.50 per share. Its reported revenue was about on par with expert estimates at $291 billion, and it also boasts a competitive dividend yield of 1.88%. As the company announces its new foray into China’s $200 billion food delivery market, now could be an opportunistic time to increase holdings in this up-and-coming Chinese holding.
New Addition Baidu Sees 7% Portfolio Debut
Another major winner in Tepper’s portfolio adjustment was Baidu, Inc. (NASDAQ: BIDU), a leading Chinese technology company specializing in search engine services and AI development. Appaloosa Holdings reported BIDU as a new addition in its most recent quarterly holdings report, representing 7.22% of portfolio assets.
BIDU offers investors a strong consensus price target of $112.08, representing a potential upside of about 20%. Short interest data looks promising for Baidu as well, with a 2.56% decrease in short interest, indicating increasing investors' confidence in the long term. While this stock holds a less aggressive Hold rating from analysts, it could be worth considering as a growth play as China’s AI sector heats up.
Li Auto Races Away With 24% Potential Upside
Move over, Tesla. Investors interested in adding an international EV manufacturer may want to consider Li Auto (NASDAQ: LI). Responsible for the design and development of premium smart electric vehicles, with a price target of $32.77—a potential upside of 24.59%.
Li Auto can be a strong choice for investors looking for growth potential and those who can handle a higher risk-return ratio. It currently maintains a projected earnings growth rate of 81.63% in the coming year, with short interest being down 7.5% from the previous month. These factors may compensate for the stock’s lack of a dividend, especially for long-term investors.
NetEase Streams Consistent Upward Price and Dividend Trends
The Chinese video streaming market is anticipated to increase by more than $110 billion by 2028, drawing investor interest to this market made up of more than 800 million online users. NetEase, Inc. (NASDAQ: NTES) is an online streaming service provider with an AI research department that gives it an edge over competitors. Its NetEase Fuxi segment, in particular, has been driving investor interest in the emerging AI gaming sphere.
NetEase backs up its inspired AI offerings with strong financials, particularly in its dividend data. The company boasts a Moderate Buy rating, with a current consensus price target of $110. When compared to other Chinese stocks, NetEase focuses more heavily on supporting investor income, with a dividend yield of 1.59% and a payout ratio of 29.22%. It also boasts a 43.64% annualized three-year dividend growth, ideal for income investors thinking long-term.
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The article "David Tepper Loads Up on China—These 5 Stocks Stand Out" first appeared on MarketBeat.
