3 Overlooked IPOs to Buy Now

Snapchat parent company Snap Inc. (NASDAQ: SNAP), came public earlier this year in one of the most anticipated initial public offerings (IPOs) in recent memory.

However, like so many high-profile technology IPOs over the last couple years, it’s anyone’s guess how Snap will play out. Technology companies get a lot of hype, but they don’t always payoff for retail investors.

Examples aren’t hard to come by. Shares of Groupon (NASDAQ: GRPN) are down more than 80% since its first day as a public company. Zynga (NASDAQ: ZNGA)’s stock is off 70%. FitBit (NYSE: FIT) is down 80%. Lending Club (NYSE: LC) has fallen 80%. It’s still tough to pick winners among tech IPOs.

There are better opportunities for investors. Our research has identified three IPOs from the last year that investors may want to consider. Shares of all three are still trading at attractive prices.

With that in mind, here are the three overlooked IPOs to own:

Trivago (NASDAQ: TRVG)

Trivago shares are up just 10% from its IPO in December. Users can search and compare hotels and rates on Trivago, making it trio in the industry with Priceline (NASDAQ PCLN) and Expedia (NASDAQ: EXPE). Trivago was the last “big” IPO of 2016, but shares are flat in 2017.

More people are traveling, and that is a powerful trend for Trivago and the travel industry. Booking platforms and hotels advertise on Trivago and pay for the clicks received from Trivago users. It’s worth noting that Expedia owns the majority stake in Trivago, and Priceline is where it gets a lot of its revenue. Considering both Priceline and Expedia are both very solid and stable companies within the travel industry, having such a close relationship with the two isn’t necessarily a negative. Trivago continues to grow revenues nicely, and trading at just two times sales, it’s trading at a discount to major peers.

ZTO Express (NYSE: ZTO)

ZTO Express is a Chinese package-delivery company that came public in October 2016. Shares have fallen almost 33% from its October IPO price as investors remain cautious about the Chinese economy.

However, the growth opportunity in the Chinese shipping industry will continue to do well given the large population. The parcel delivery market in China is expected to more than double from $600 billion in 2015 to $1.5 trillion in 2020.

ZTO Express is a diversified bet on the continued boom of the e-commerce market in China. And for U.S. investors, ZTO is the best way to tap into the consumer market in China. Plus, the company is already profitable, which is rare for a newly public company.

MGM Growth Properties (NYSE: MGP)

MGM Growth Properties is the real estate spinoff of MGM Resorts (NYSE: MGM) and it completed its IPO last year. It’s a real estate investment trust (REIT) that owns and leases casinos and hotels. The beauty of REITs is that they pay impressive dividends, and MGM Growth’s dividend does not disappoint. It offers a 6% dividend yield.

The REIT is one of the best pure-plays on the U.S. gambling market, with the majority of its resorts in Las Vegas. But shares are flat over the last six months. Investors are shunning the casino stocks; they’re worried about a slowdown. However, MGM is a big bet on the growth and rebound of the Las Vegas gambling market. MGM Resorts offers an attractive 6% dividend investors won’t find elsewhere.

All three overlooked IPOs above are relatively new issues that are still attractive buying opportunities. Also read :goo.gl/eNwbsR

By Marshall Hargrave

Source:https://goo.gl/PgUzJa

China Stock Roundup: Sohu.com Posts Loss, Changyou.com Beats, New Oriental Misses

CYOU SOHU NOAH EDU

Markets dipped moved lower toward the end of the week, weighed down by fears over the lack of liquidity in the system and a weak yuan. The benchmark index increased on Monday, boosted by gains in resource shares. The Shanghai Composite Index moved higher on Tuesday with gains coming during the last moments of the trading day.

Sohu.com Inc.’s (SOHU - Analyst Report) shares fell nearly 7% on Oct 24 after the company’s third-quarter 2016 earnings results. Changyou.com (CYOU - Snapshot Report) reported adjusted third-quarter 2016 earnings of 73 cents per share, beating the Zacks Consensus Estimate of 48 cents.The benchmark index declined on Wednesday, losing the most in a week. The Shanghai Composite Index moved 0.3% lower on Thursday following disappointing data on industrial profits and concerns over a weak yuan and tight liquidity levels.

Last Week’s Developments

Last Friday, the Shanghai Composite increased 0.2% after indications that the economy was stabilizing negated concerns about a weak yuan. Markets in Hong Kong were closed because of a typhoon. The benchmark index rose for the second successive week, gaining 0.9%. The yuan slumped to its lowest level in six years following the central bank’s decision to cut its daily reference rate by the largest extent since August.

Investors received a series of encouraging reports last week. Credit growth increased last month while third quarter GDP and retail sales were in line with expectations. The CSI 300 increased 0.3% and gained 0.7% over last week. Shares of infrastructure companies gained substantially after the government outlined rules for the management of funds utilized for PPP projects. These gains outweighed losses incurred due to a weak yuan and reverses in real estate stocks.

Markets and the Economy This Week

The benchmark index increased 1.2% on Monday, boosted by gains in resource shares. Companies from this sector were buoyed by indications that measures attempts by the government to cut overcapacity in steel and coal were meeting with success. Stocks of coal mining and steel producing companies increased substantially. This was a result of indications that these commodities might experience price gains following government attempts to cut capacity in these areas.  

An index of coal stocks gained in excess of 5% following reports that power supply companies were failing in their attempts to source coal. Stocks in Hong Kong moved higher, powered by gains on the mainland. However, gains were curbed by fears surrounding a weak yuan and chances of a Fed rate hike in December. The Hang Seng increased 1% while the Hang Seng China Enterprises Index added 1.7%.

The Shanghai Composite Index added 0.1% on Tuesday with gains coming during the last moments of the trading day. The benchmark index touched its highest point in nine months following expectations that the government will increase infrastructure spending. Additionally, speculation arose that attempts to reduce property prices will free up funds for investments in equities.

The benchmark index declined 0.5% on Wednesday, losing the most in a week. Losses were a result of nagging concerns regarding stringent liquidity levels which have driven up treasury yields. Additionally, a decline in resources shares, the result of a correction following consecutive days of gains, outweighed gains made by consumer and healthcare stocks. An index of healthcare stocks gained following expectations of higher earnings after a new plan to expand the sector was released by the government. The CSI 300 lost 0.4%.Steelmakers and coal mining companies witnessed substantial gains for the second successive day following the government’s success in cutting overcapacity in these sectors. The CSI ended the day nearly flat. The Hang Seng lost 0.2%. The Hang Seng China Enterprises Index also moved 0.2% lower.

Stocks in Hong Kong suffered their most grievous losses in two weeks after investor sentiment was dampened by weakness on the mainland and on Wall Street. The Hang Seng lost 1% while the Hang Seng China Enterprises Index declined by 1.4%. Investors remained wary ahead of the U.S. presidential election, the likelihood of a Fed rate hike in December and concerns about the health of China’s economy.

The Shanghai Composite Index moved 0.3% lower on Thursday following disappointing data on industrial profits and concerns over a weak yuan and tight liquidity levels. The CSI 300 declined by 0.4%. Industrial profits increased by only 7.7% in September, significantly lower than the 19.5% pace recorded in August. Meanwhile, the yuan fell to a new six-year low. 

Additionally, signs emerged that the government was attempting to reduce the amount of corporate leverage in the system. The Hang Seng moved 1.2% lower while the Hang Seng China Enterprises Index lost 1.5%. An index of energy shares listed in Hong Kong declined in excess of 2%.

Stocks in the News

Sohu.com Inc.’s shares fell nearly 7% on Oct 24 after the company’s third-quarter 2016 earnings results. The company posted non GAAP loss of $1.68 as against earnings of $1.27 per share in the prior-year quarter. Sohu has a Zacks Rank #3 (Hold).

Even revenues in the quarter were down 21.4% to $410.6 million, primarily due to lower revenues from advertising and online gaming. Total online advertising revenues (inclusive of revenues from brand advertising, search and search related businesses) fell 13% to $262 million.

Brand advertising revenues in the reported quarter fell 27% to $111 million, owing to sluggishness in the video ads business. The company’s revenues from Sohu Media Portal decreased 6% year over year to $48 million while that from Sohu Video fell 54% to $25 million.

For the fourth quarter of 2016, Sohu expects revenues in a range of $370 million–$400 million. Management estimates brand advertising revenues in a range of $95 million to $105 million, representing 25% to 33% year-over-year decline. The company expects non-GAAP loss per share to be between $2.20 and $2.45. (Read: Sohu.com (SOHU - Analyst Report) Shares Fall on Q3 Loss, Revenues Decline)

Changyou.com reported adjusted third-quarter 2016 earnings of 73 cents per share, beating the Zacks Consensus Estimate of 48 cents. This was also higher than adjusted earnings of 62 cents per share reported in the second quarter of 2016. However, this was lower than the $1.55 reported in the same period last year. Changyou.com has a Zacks Rank #3.

The online game developer and operator reported revenues of $136 million. This was 5% higher than the figure posted in the second quarter of 2016. However, revenues registered a year-over-year decline of 28%. Online game revenues came in at $99 million, 1% lower than the second quarter of 2016. Additionally, this represents a year-over-year decline of 35%.

Online advertising revenues declined 36% from the same period last year to $12 million. However, they experienced a 1% increase from last quarter’s figure. Revenues from Internet value-added services (IVAS) declined 15% on a yearly basis and declined 5% from last quarter’s figure to come in at $4 million.

New Oriental Education and Technology Group Inc. (EDU - Snapshot Report) reported first-quarter fiscal 2016 earnings of 89 cents per share, lower than the Zacks Consensus Estimate of 99 cents. However, this was substantially higher than adjusted earnings of 27 cents per share reported in the fourth quarter of 2015. This was also higher than adjusted earnings of 82 cents per share reported in the same period last year.

Revenues increased 17.7% year over year to $534 million. Educational programs and services reported net revenues of $494.3 million, an improvement of 17% compared to the same period last year. The number of student enrollments for New Oriental’s K-12 after-school tutoring courses increased by 31.2% compared to the same period last year. The stock has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Noah Holdings Limited (NOAH - Snapshot Report) revealed that it will be receiving a strategic investment of RMB348 million (US$51.7 million) from Sequoia Capital China. The venture capital company will be making this investment in Gopher Asset Management Co., Ltd, the asset management subsidiary of Zacks Rank #3 (Hold) rated Noah Holdings.

Sequoia Capital China, which is an existing shareholder of Noah, will be acquiring an undisclosed stake in an entity which will be holding all the equity interests of Gopher. The stake has been reported to be lower than 10%. Gopher holds all the wealth and asset management assets which amounted to RMB101.2 billion (US$15 billion) as of June 30, 2016.

Performance of Most Actively Traded US-listed Chinese Stocks

The table given below shows the price movements of 10 Chinese companies with the highest three-month average trading volume on U.S. exchanges. Price movements over the last five days and during the last six months have been included.

Ticker	Last 5 Day’s Performance	6-Month Performance
BABA	-1.5%	+32.4%
VIPS	-3.2%	+3.3%
JD	+0.3%	+4.5%
CTRP	-1.2%	+3.6%
SFUN	-0.6%	-36.9%
BIDU	-1.4%	-8.1%
WB	-3.9%	+117.3%
MOMO	+6.6%	+58.1%
BITA	-1.5%	+6.3%
EDU	+12.6%	+32.1%

Next Week’s Outlook:

Fears surrounding the impact of a weak yuan and tight liquidity levels outweighed the optimism gained from the surge in resources shares. However, these gains were a result of the government meeting with success in its attempts to cut overcapacity. At the same time, fresh worries about the economy surfaced following weak data on industrial reports.

Notwithstanding recent optimism about the economy, fresh doubts seem to have emerged. This is why economic releases scheduled for next week, including data on housing as well as business and consumer sentiment is likely to have a major role in determining the direction of stocks in the days ahead.

Where Do Zacks' Investment Ideas Come From?

You are welcome to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buy" stocks free of charge. There is no better place to start your own stock search. Plus you can access the full list of must-avoid Zacks Rank #5 "Strong Sells" and other private research. See the stocks free >>

by Swarup Gupta   

Source: https://www.zacks.com/stock/news/236571/china-stock-roundup-sohucom-posts-loss-changyoucom-beats-new-oriental-misses

Is Now the Time for Chinese Stocks?

While the mainstream non-financial media choose to focus their attention to all the problems in Greece and its debts, an even bigger problem was brewing over in China. It seems that bubble in China’s overheated market may have finally burst. Panic selling in Chinese shares caused the nation’s markets to free fall causing many analysts to question whether or not China’s best days were now behind it and that this was a real crash or not.


But savvy investors know that there is big money to be made in calamity. For those portfolios with long term timelines, China is still ripe for some big time profits as its economy expands and switches to a more consumer driven one. The question now, is just whether or not to scoop up some of the values created by the crash. (For more, see: Greece or China: Which is the Bigger Worry?)

TOO MUCH HOT MONEY

The problems in China stem from a classic too much capital flowing into its markets. Like the U.S., interest rates are pretty abysmal. To that end, many mom-and-pop investors have been plowing their savings into the market heavily over the last year or so. That fact has been exacerbated by the recent ease of restrictions allowing regular retail investors access to brokerage accounts in China. In the end, Chinese stocks became a classic bubble. Think of the dotcom crash. It was all over when your grandmother was talking about business to business (B2B) stocks.

THEN THE BUBBLE BURST

Lower gross domestic product (GDP) numbers, earnings and extremely overvalued shares caused the selling to begin. Since the middle of June, China’s two main markets are down by considerable amounts. The Shanghai Composite has lost nearly 30% of its value, while the tech-heavy Shenzhen has plunged by over 40%. Adding to the panic selling is the ability of Chinese firms to halt/pull their shares to prevent further declines. At one point, nearly 60% of the stocks listed on the Shenzhen were halted. (For more, see: How China's GDP Is Calculated.)

But all the panic could be overblown and for longer-term investors, it could be a huge opportunity. To start with, Beijing has pulled out all the stops when it comes to rescuing its faltering markets. The nation’s central bank has cut interest rates to make it easier for investors to borrow and buy stocks. Additionally, brokerage firms - via cheap loans courtesy of China's Securities Finance Corporation - have steeped in as buyers of last resort. That’s put price floors on many shares. Finally, regulators have suspended all new initial public offering (IPO) activity. All in all, China has unveiled ten major actions to help prop up the stock market. (For more, see: China's GDP Examined: A Service-Sector Surge.)

Those efforts seem to be working as both the Shenzhen and Shanghai indexes have reversed their free falls. Longer term, much of China’s growth story remains intact. It’s vast consumer potential, relatively high GDP growth rates and financial prowess still makes it worthy of a portfolio. And investors can gain access at much cheaper prices. The broad-based exchange traded fund(ETF) iShares China Large-Cap ETF (FXI) can be had for a dirt cheap price-earning-ratio (P/E) of just 11.

TAKING THE CHINESE STOCK PLUNGE

With 30% and 40% plunges in the books already, the worst may be over for Chinese stocks. And it be a prime buying opportunity for investors. The previously mentioned FXI is the top Chinese ETF when it comes to asset size and trading volume, but a better pick could be iShares MSCI China ETF (MCHI). (For more, see: China ETFs: GXC vs. FXI.)

MCHI’s underlying index tracks both large and mid-cap stocks within China. FXI only focuses on the largest of the large. The broader mandated ETF holds 145 stalwarts in the nation, such as telecom China Mobile (CHL) and oil major PetroChina (PTR). These aren’t fly-by-night stocks and actually represent some of the largest firms in the world, let alone China. They’ll be here long after the crash plays itself out. Overall, MCHI provides a good mix of Chinese state-owned enterprises (SOEs) as well as pure-public plays in the nation. Expenses for the $2 billion ETF are relatively cheap as well at only 0.62%.

For those with iron stomachs and who can handle the volatility the Chinese A-share market, which is only available to Chinese citizens or qualified investors, could be the biggest value. There are several ETFs that allow you to directly tap into the Shenzhen and Shanghai markets. The two that matter are the Market Vectors ChinaAMC SME-ChiNext (CNXT) and Deutsche X-trackers Harvest CSI 300 China A-Shares Fund (ASHR). (For more, see: What's the Best ETF for the Shanghai Composite Index?)

Both have qualified investor status and actually own the A-shares rather than swaps replicating the performance. ASHR tracks large-cap domestically issued Chinese stocks, while CXNT focuses on the small and mid-cap space.  Both have seen their share prices plunge as a result of the panic in China. However, they represent the future as China works towards opening its markets to outside investors.

Likewise, Chinese small-caps have been equally as decimated as its A-shares. The Guggenheim China Small Cap ETF (HAO) continues to be the prime way to gain access to China’s small-caps that aren’t off-limits to foreign investors. (For more, see:Three Ways to Trade Big Moves in the China Market.)

Finally, for those investors looking for China without so much risk, its bond market seems ripe for the picking. PowerShares Chinese Yuan Dim Sum Bond ETF (DSUM) tracks Chinese yuan-denominated bonds issued by Beijing and other government agencies. The fund’s duration is very short and DSUM currently yields 3.15%. That’s pretty impressive considering where it sits on the yield curve. (For more, see: The Chinese Yuan Bond ETF.)

THE BOTTOM LINE

The recent panic in China’s stock markets could be seen as a buying opportunity for longer-term investors. Much of the nation’s growth story remains intact. Those who can stomach the volatility could begin to nibble at some of the bargains in Chinese stocks at these levels. (For more, see: How to Profit from News about China.)

By Aaron Levitt

Source: http://www.investopedia.com/articles/markets/071515/now-time-chinese-stocks.asp

5 Reasons to Buy Alibaba Stock Now (NYSE: BABA)

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Now is one of the best times to buy Alibaba stock.

Alibaba Group Holding Ltd. (NYSE: BABA) stock has fallen 25% in 2015. Today, BABA hit its lowest value to date at $77.77. The company will announce quarterly and fiscal-year earnings on Thursday, May 7.

But this year's Alibaba stock price slump is not a bad sign for the long-term value of BABA.

"For investors, an error of omission with Alibaba stock would be worrying about the short-term and missing the stock's long-term potential," Money Morning's Executive Editor Bill Patalon said.

Money Morning experts are extremely bullish on BABA stock now. In fact, Money Morning's Defense and Tech Specialist Michael Robinson recently said Alibaba "could be the single-greatest wealth opportunity of our lifetime."

Here are the five biggest reasons to buy Alibaba stock today…

Reasons to Buy Alibaba Stock No. 1: Chinese E-Commerce Growth

Alibaba is China's largest e-commerce company. In 2014, Alibaba's network of sites handled roughly 80% of all online transactions in the country.

In 2013, online shopping in China was a $298 billion industry. That surpassed the United States as the largest e-commerce market in the world.

And the market is growing at an incredible rate.

New research from AT Kearny estimates Chinese e-commerce will total $718 billion by 2017.

"Alibaba is gaining traction in its home market in China just as that country's people are truly joining the Internet revolution," Robinson said. "And the development of easy-to-use mobile commerce is giving Alibaba a strong tailwind."

A recent study by the China Internet Network Information Center (CNNIC) determined the number of Internet users in the country will hit 800 million by 2016 or sooner.

Reasons to Buy Alibaba Stock No. 2: Mobile Growth

Alibaba has invested heavily in its mobile development.

In February, it spent $590 million on a minority stake in the Chinese smartphone maker Meizu. Before that, Alibaba spent $1.9 billion on the mobile web developer UCWeb. It also dropped $215 million for a minority stake in the messaging app Tango.

Those purchases have been paying off.