12 Most Undervalued Large Cap Stocks to Buy Now

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9. JD.Com Inc. (NASDAQ:JD)

Forward Price-to-Earnings Ratio as of March 4: 9.75

Number of Hedge Fund Holders: 78

JD.Com Inc. (NASDAQ:JD) is a Chinese supply chain-based technology and service provider. It offers products like electronics, home appliances, and general merchandise. It also offers online marketplace services, marketing solutions, and omni-channel capabilities. Beyond its core retail operations, it develops and manages logistics infrastructure, provides integrated technology and supply chain solutions, and offers online healthcare services.

JD Logistics is a key component of the company’s overall success and is building a strong logistics network. In Q3 2024, the segment’s revenue grew by 7% year-over-year, with internal revenue up 8% and external revenue up 6%. This growth shows the effectiveness of JD Logistics’ efforts to expand its reach and service both JD.Com Inc. (NASDAQ:JD) and external clients. The company improved its profitability in Q3 through this segment. Non-GAAP operating income saw a 624% year-over-year increase.

JD Logistics is expanding globally with doubled warehouse capacity anticipated by 2025. It’s investing heavily in smart technologies like AI and automation to enhance efficiency and customer experience. These include such intelligent warehousing systems and 5G-powered smart logistics parks.

Ariel Global Fund is highly positive on the company due to its strong performance driven by Chinese stimulus, improved consumer spending, successful diversification strategies, and the ability to capitalize on growth opportunities like home appliance trade-in programs. It stated the following regarding JD.Com Inc. (NASDAQ:JD) in its Q3 2024 investor letter:

“China-based E-commerce company, JD.com, Inc. (NASDAQ:JD) was the top contributor in the quarter as the People’s Bank of China’s (PBOC) comprehensive stimulus measures bolstered investor confidence in the Chinese economy. The improving economic sentiment is fueling consumer spending which benefits the company’s retail operations. Additionally, the company’s strategic decision to diversify general merchandise product offerings, expand its third-party marketplace business and monetize advertising streams has contributed to consecutive quarterly earnings beats. JD.com is also poised to capitalize on the home appliance trade-in program, which is one of its largest product categories. Given the favorable market environment, the company’s strategic positioning and supply chain efficiency improvements, we continue to like its long-term growth prospects.”

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