In this article, we discuss the 4 China rebound stocks to buy according to Jim Cramer. If you want to read about some more stocks that Jim Cramer recommends, go directly to 9 China Rebound Stocks to Buy According to Jim Cramer.
4. NIKE, Inc. (NYSE:NKE)
Number of Hedge Fund Holders: 67
NIKE, Inc. (NYSE:NKE) makes and sells athletic products. Jim Cramer has backed the company to smash market estimates on earnings in the coming months, predicting that the earnings call of the firm in the next quarter will be “very different” from the recent one in which the guidance disappointed analysts. Cramer has said that those who had sold NIKE, Inc. (NYSE:NKE) would “regret it” and identified the FIFA World Cup and China reopening as some of the growth catalysts for the stock in the summer.
On June 29, Barclays analyst Adrienne Yih maintained an Overweight rating on NIKE, Inc. (NYSE:NKE) stock and lowered the price target to $125 from $140, noting the firm was battling overall consumer slowdown and persisting macro pressures.
Among the hedge funds being tracked by Insider Monkey, London-based investment firm Fundsmith LLP is a leading shareholder in NIKE, Inc. (NYSE:NKE), with 6.7 million shares worth more than $905 million.
In its Q4 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and NIKE, Inc. (NYSE:NKE) was one of them. Here is what the fund said:
“NIKE, Inc. (NYSE:NKE) is another play on e-commerce as well as the anticipated growth in consumer spending as we learn to live with COVID-19. After selling out of the stock in 2016 due to competitive concerns, we were motivated to repurchase shares because of optimism around a new management team’s focus on accelerating Nike’s shift toward e-commerce and direct-to-consumer (DTC) distribution. Near-term supply chain issues in Vietnam and retail weakness in China that we see as ephemeral provided a good buying opportunity. We do not believe the market is giving proper credit to Nike’s potential to deliver attractive, high-single-digit revenue growth while delivering operating margin expansion as more merchandise is sold direct. NIKE, Inc. (NYSE:NKE) is also still under indexed to the women’s category, which we see as a significant ongoing catalyst.”
3. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 80
Tesla, Inc. (NASDAQ:TSLA) markets electric vehicles and clean energy solutions. In mid-May, Cramer highlighted that the market was placing “too much fear” around names like Tesla, Inc. (NASDAQ:TSLA) in light of their dependence on China. Cramer noted that the firm had delivered during the pandemic and advised investors to stick with the company. He predicted that the firm would do a lot more business in China as virus restrictions were eased and pent-up travel demand increased car sales.
On June 30, Goldman Sachs analyst Mark Delaney maintained a Buy rating on Tesla, Inc. (NASDAQ:TSLA) stock with a price target of $1,000, underlining that the fast-charging network of the firm was a key asset of the company with a $3 billion revenue opportunity.
At the end of the first quarter of 2022, 80 hedge funds in the database of Insider Monkey held stakes worth $11 billion in Tesla, Inc. (NASDAQ:TSLA), compared to 91 in the previous quarter worth $12 billion.
Here is what Grantham Mayo Van Otterloo & Co. LLC has to say about Tesla, Inc. (NASDAQ:TSLA) in its Q1 2022 investor letter:
“To put the demand growth for clean energy materials into perspective, let’s look at Tesla, Inc. (NASDAQ:TSLA). At its Battery Day last year, Tesla, Inc. (NASDAQ:TSLA) projected three terawatt hours of lithium-ion battery capacity needed in 2030 for the EVs and storage they expect to produce. To reach this target, Tesla alone would gobble up approximately 75% of the world’s current nickel production and four times the world’s current lithium production. These numbers are astounding enough, but when one considers that EVs currently represent just 15% of global nickel demand and about 45% of lithium demand and that Tesla will likely be producing only a small proportion of the world’s EVs in 2030, the implications are staggering. Clean energy materials companies will make a lot more money in the decades to come than they ever have both because they will be selling a lot more metric tons of material and because there are certain to be shortages where supply can’t keep up with the rapidly growing demand.”
2. The Walt Disney Company (NYSE:DIS)
Number of Hedge Fund Holders: 113
The Walt Disney Company (NYSE:DIS) operates as an entertainment company. During an appearance on CNBC on June 28, Cramer said that people wanted to focus on everything that was wrong with the company and even though it had a bad month, he backed the company to emerge as one of the biggest winners from the China reopening in the coming months. Cramer even referred to the firm as one of the “most-hated” stocks in the world but one he thought would perform “the best” in the coming months.
On June 30, Morgan Stanley analyst Benjamin Swinburne maintained an Overweight rating on The Walt Disney Company (NYSE:DIS) stock and lowered the price target to $125 from $170, noting that the target was lowered due to the loss of the IPL cricket rights in India and risk of weak consumer demand.
At the end of the first quarter of 2022, 113 hedge funds in the database of Insider Monkey held stakes worth $5.1 billion in The Walt Disney Company (NYSE:DIS), up from 111 the preceding quarter worth $6.9 billion.
In its Q1 2022 investor letter, Harding Loevner, an asset management firm, highlighted a few stocks and The Walt Disney Company (NYSE:DIS) was one of them. Here is what the fund said:
“The war in Ukraine has given new urgency to the question of whether globalization has reached a tipping point and if the familiar web of decentralized, just-in-time, global supply chains will be a casualty of the inward turn dividing countries into competing trading blocs. It is probably too soon to know. We sold The Walt Disney Company (NYSE:DIS), due to some concerns about the increasing capital intensity of its business amid signs of rising competition and slowing growth in streaming media consumption.”
1. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 131
Apple Inc. (NASDAQ:AAPL) is a consumer electronics firm. Cramer has dismissed concerns around supply-chain problems that the company is facing in China, noting that the firm was among a handful of American companies with “pricing power”. He also advised investors to stick with “profitable, recession-proof” stocks in the present market environment. Cramer noted that the company was one of the only tech giants that would benefit the most from a China reopening in the coming weeks.
On July 1, JPMorgan analyst Samik Chatterjee maintained an Overweight rating on Apple Inc. (NASDAQ:AAPL) stock with a price target of $200, noting the near-term fortunes of the company remained resilient despite macro concerns on the economy.
At the end of the first quarter of 2022, 131 hedge funds in the database of Insider Monkey held stakes worth $182 billion in Apple Inc. (NASDAQ:AAPL), compared to 134 in the previous quarter worth $186 billion.
In its Q1 2022 investor letter, Weitz Investment Management highlighted a few stocks and Apple Inc. (NASDAQ:AAPL) was one of them. Here is what the fund said:
“Changes to the Apple Inc. (NASDAQ:AAPL) mobile operating systems have temporarily impacted growth of Meta’s advertising business just as the company’s investments in Instagram’s “Reels” feature ramp ahead of full monetization. (Shareholders can read research analyst Jon Baker’s in-depth discussion of current events impacting Meta and reasons why we’re optimistic about the company in our recent Analyst Corner feature.) CoreCard (formerly Intelligent Systems) struggled early in the fiscal year to hire and train staff to handle growth from new and existing clients. Lately, Apple-related headlines also took a bite out of CoreCard shares, as reports suggest Apple Inc. (NASDAQ:AAPL) is exploring a transition of its credit card and other financial services to internally built solutions. Such a move would create revenue headwinds for its partners, which CoreCard is widely believed to be. We are monitoring these developments and stress-testing our model accordingly.”
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