In this article, we will look at the 10 Cheap Internet Stocks to Buy According to Hedge Funds.
Would March See a Pickup in Retail?
On March 6, Jan Kniffen, CEO of J Rogers Kniffen, appeared on CNBC’s ‘Squawk on the Street’ to discuss his outlook on retail. Weaving several threads of news in the retail space, he said that the fourth quarter was great despite an awful January and February due to the weather. However, the market is going to see a pickup in March as the calendar inches closer to Easter because even in the otherwise horrible month of February, the market saw a good Valentine’s Day.
He believed that March would see a pickup because the consumer still feels healthy, even if they are nervous. Spending has been pretty good on everything other than weather-related items, but the traffic has been slow. Kniffen believed that this trend is weather-related as well. He said that he isn’t too concerned yet, but while the retail numbers today may not make one nervous, tomorrow’s numbers may have the opposite effect. According to Kniffen, retailers are only seeing a little weakness, and that’s all weather-related.
READ ALSO: 12 Best Leisure Stocks to Buy Right Now and 12 Best Apparel Stocks to Invest In.
What Could Trump’s Tariffs Mean for the Retail Industry
Talking about the potential effects of tariffs on retailers, he was of the view that power and negotiating skills make up the necessary concoction to deal with the scenario. Companies with better logistics teams, experience with dealing with tariffs strategically, and a healthy position in terms of balance sheet are more likely to do well. Therefore, companies in the sector that are well-financed, boast great teams, and are executing flawlessly will do better than those struggling with dealing with tariffs. While Kniffen said that he couldn’t claim he isn’t worried about the tariffs, he isn’t terrified of them either, as the market knows how to deal with them.
The real question he posed was whether all that the market gets is 10% to 20% in China or whether it would really get 25% in both Canada and Mexico. In the second case, the whole economy gets dislocated, the consumer gets nervous, and everyone is terrified that they will quit spending and the market may go into a consumer-led recession.
However, if the tariffs were imposed only on China, the situation might be different. China has a significant export economy and would have to absorb a big chunk of the tariffs. It did so last time as well and is likely to do the same this time as well. The market will then also see substitution, trade down, and all the stuff we see when the consumer has to deal with it. The retail market will react to all that, and the big and strong members will likely react better.
With these trends in view, let’s look at the 10 cheap internet stocks to buy according to hedge funds.
A businesswoman using her mobile device to shop on a ecommerce platform.
Our Methodology
We sifted through stock screeners, online rankings, and ETFs to compile a list of internet stocks with forward P/E less than 15, including stocks from the internet retail and internet content & information sectors. We then selected the top 10 with the highest number of hedge fund holders as of Q4 2024. We sourced the hedge fund sentiment data from Insider Monkey’s database. The list is sorted in ascending order of hedge fund sentiment.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10 Cheap Internet Stocks to Buy According to Hedge Funds
10. Vipshop Holdings Limited (NYSE:VIPS)
Forward P/E: 7.06
Number of Hedge Fund Holders: 25
Vipshop Holdings Limited (NYSE:VIPS) is an online discount retailer for Chinese brands that primarily offers branded products to consumers through its website. It conducts its operations through Chinese subsidiaries and consolidated affiliated entities. Its product offerings include more than 17,000 international and domestic brands, including home goods, apparel, cosmetics, fashion goods, and other lifestyle items.
Despite a challenging year, the company’s results for fiscal Q4 2024 surpassed expectations. It saw positive growth in apparel categories, which accounted for 75% of total Gross Merchandise Volume, allowing it to surpass RMB200 billion in annual sales. Vipshop Holdings Limited (NYSE:VIPS) also saw a 2% year-over-year growth in the apparel category, which was attributed to a focus on retail fundamentals and strong execution. It offered unique off-price seasonal offerings, especially outdoor products and sportswear, further boosting growth.
Vipshop Holdings Limited (NYSE:VIPS) is focusing on improving its customer engagement, with its Super VIP membership undergoing double-digit growth in fiscal Q4 2024. Active members experienced a 50% year-over-year increase, bringing a positive light to the company. It ranks tenth on our list.
9. JOYY Inc. (NASDAQ:YY)
Forward P/E: 11.54
Number of Hedge Fund Holders: 26
JOYY Inc. (NASDAQ:YY) is a global technology company that operates a range of social products, including Likee for short-form videos, Bigo Live for live streaming, Hago for multiplayer social networking, an instant messaging product, and more. Its operations are divided into two segments: BIGO and All other. The BIGO segment covers social entertainment platforms such as Bigo Live, Likee, and imo, while the All other segment manages Hago, Shopline, and certain audio live streaming platforms.
The company is maintaining a strong focus on optimizing its products, executing its strategic priorities, boosting its global operational efficiencies and capabilities, and expanding its market penetration in developed countries. These efforts are yielding positive results for JOYY Inc. (NASDAQ:YY). Its group revenue reached $558.7 million in fiscal Q3 2024. BIGO, its core business segment, reported revenues of $496 million, delivering a slight year-over-year increase.
Furthermore, JOYY Inc.’s (NASDAQ:YY) stock is up significantly so far in 2025 after the finalization of the sale of its YY Live business in China to Baidu for $2.1 billion. On February 25, 2025, it received a final payment of $240 million. The company also resolved the safety concerns that resulted in Bigo Live’s removal from app stores, reinstating it on Google Play, and negotiating its potential return to Apple’s App Store.
