Five ADRs Hedge Funds Are Bullish On: Baidu, Shire, JD.Com, More

#3. Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP)

Going into the second quarter, the third-most popular ADR among the hedge funds that we track was Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP), which counted 67 supporters in our database, who held roughly 17.3% of its float. Notable positions were held by Ken Fisher’s Fisher Asset Management, which disclosed ownership of 9.32 million ADRs, and Lei Zhang’s Hillhouse Capital Management, with 8.16 million ADRs.

On Thursday, Barron’s Asia reported that investors are not overly optimistic about Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP)’s acquisition of Qunar Cayman Islands Ltd (NASDAQ:QUNR), pointing out that more than 27% of the latter’s free float is currently borrowed for loans, which is usually seen as a proxy for short interest. “Qunar’s management famously dislikes Ctrip and investors question if Qunar’s integration will be smooth and whether Ctrip will just swallow up Qunar’s business,” the article explained.

#2. Baidu Inc (ADR) (NASDAQ:BIDU)

Baidu Inc (ADR) (NASDAQ:BIDU) is the runner-up in this list, with 72 hedge fund backers among those we track as of March 31, up by 30.9% quarter-over-quarter, with them holding 9.3% of its float. Harris Associates, a subsidiary of Natixis Global Asset Management, initiated a stake in the company comprising roughly 4.69 million ADRs worth $895 million as of March 31.

Baidu Inc (ADR) (NASDAQ:BIDU) experienced plenty of volatility over the March quarter, but the stock ended up relatively flat, being up by 0.97%. Performance in the second quarter was quite choppy as well, with the stock down by more than 9% to date. The decline was largely driven by an investigation launched by Chinese regulators following the death of a student there, who passed away after allegedly undergoing an experimental cancer treatment through a paid advertisement on Baidu’s search engine, which ultimately did not manage to cure his rare form of cancer.

#1. JD.Com Inc(ADR) (NASDAQ:JD)

Finally, there’s JD.Com Inc(ADR) (NASDAQ:JD), the most popular ADR among the funds in our database, counting 73 supporters, which held almost 40% of the company’s float as of March 31. Lei Zhang’s Hillhouse Capital Management was by far the largest institutional shareholder of record, with 123.2 million ADRs valued at $3.26 billion as of March 31. Another large stake was held by Tiger Global Management, which disclosed ownership of 44 million ADRs of the Chinese company.

The ADRs of JD.Com Inc(ADR) (NASDAQ:JD), which fell by 17.87% over the first quarter, continued to tumble in the second quarter, losing another 13.2%. Most recently, the stock has been suffering on the back of an SEC probe which its rival, Alibaba Group Holding Ltd (NYSE:BABA), was subjected to. The probe into Alibaba’s accounting practices may have caused some small seeds of doubt to grow in the minds of investors when it comes to Chinese stocks in general.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned in this article.