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Nov. 22, 2017, 5:06 a.m. EST

If you like the FAANGs, you’ll love these three year-end melt-up candidates

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By Shawn Langlois, MarketWatch


Getty
Jack Ma, founder and chairman of Alibaba.com, gives a thumbs-up to the press at the Hong Kong stock exchange.

There’s no denying Facebook, Amazon, Netflix and the rest of the FAANG gang are clearly the belles of the 2017 stock-market ball, but if it’s true momentum you seek during the holidays, you might want to look beyond the popular picks.

Specifically, China’s where it’s at, according to the Daily Reckoning’s Greg Guenthner, who’s feeling bullish about the last few weeks of the year.

“There’s one group of stocks flying under the radar as melt-up season accelerates,” he wrote in a blog post on Tuesday. “Unfortunately, many investors have a bad habit of ignoring some of the market’s strongest plays simply because they don’t know much about the companies responsible for the gains. They’re caught up in the big narratives the media pipes into our skulls every day.”

Those narratives include Amazon’s /zigman2/quotes/210331248/composite AMZN -0.60%  big holiday shopping season, Netflix’s /zigman2/quotes/202353025/composite NFLX -0.24%  subscription pricing structure and Facebook’s /zigman2/quotes/205064656/composite FB -0.22%  record-breaking sales of targeted ads, to name a few.

There’s plenty of momentum in those names, of course, but the tastiest momentum plays, Guenthner says, are found elsewhere.

“China’s tech ADRs are once again ripping higher at a furious pace,” he said. “Pick almost any American tech company and you’ll find a similar Chinese name delivering bigger returns.”

He pointed to Amazon vs. “the Amazon of China,” one of his three picks. As you can see, Alibaba /zigman2/quotes/201948298/composite BABA -0.96%  has torched Amazon, banging out gains every single month of the year so far.

“Don’t get me wrong, Amazon is crushing it this year,” he said. “But even with its impressive gains, it can’t measure up to the powerful rallies posted by some of these Chinese highfliers.”

Another pick to end the year with a bullish bang is 58.com /zigman2/quotes/209650513/composite WUBA -0.10% , known as the “Craigslist of China.” This stock started the year under $30 a share and is currently up near $80, riding explosive financial results that made it one of the best performing stocks in the PowerShares Golden Dragon China /zigman2/quotes/207362625/composite PGJ +0.29%  portfolio.

Lastly, Guenthner said to keep an eye on Momo /zigman2/quotes/203566176/composite MOMO -1.16% , the company behind one of the fastest-growing Chinese dating apps. The stock is up about 75% this year but, he says, remains underappreciated here in the States.

“Remember, these stocks aren’t on most investor’s radar right now,” Guenthner said. “Look for them to quietly sprint higher during the holiday season.”

/zigman2/quotes/210331248/composite
US : U.S.: Nasdaq
$ 2,030.66
-12.34 -0.60%
Volume: 3.23M
April 9, 2020 2:37p
P/E Ratio
88.25
Dividend Yield
N/A
Market Cap
$1017.12 billion
Rev. per Employee
$359,671
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/zigman2/quotes/202353025/composite
US : U.S.: Nasdaq
$ 370.25
-0.88 -0.24%
Volume: 5.12M
April 9, 2020 2:37p
P/E Ratio
89.42
Dividend Yield
N/A
Market Cap
$162.85 billion
Rev. per Employee
$2.22M
loading...
/zigman2/quotes/205064656/composite
US : U.S.: Nasdaq
$ 173.90
-0.38 -0.22%
Volume: 14.99M
April 9, 2020 2:37p
P/E Ratio
27.03
Dividend Yield
N/A
Market Cap
$496.78 billion
Rev. per Employee
$1.57M
loading...
/zigman2/quotes/201948298/composite
US : U.S.: NYSE
$ 194.09
-1.89 -0.96%
Volume: 12.31M
April 9, 2020 2:37p
P/E Ratio
20.78
Dividend Yield
N/A
Market Cap
$525.76 billion
Rev. per Employee
$781,259
loading...
/zigman2/quotes/209650513/composite
US : U.S.: NYSE
$ 51.69
-0.05 -0.10%
Volume: 284,653
April 9, 2020 2:37p
P/E Ratio
6.50
Dividend Yield
N/A
Market Cap
$6.57 billion
Rev. per Employee
$93,009
loading...
/zigman2/quotes/207362625/composite
US : U.S.: Nasdaq
$ 38.17
+0.11 +0.29%
Volume: 3,013
April 9, 2020 2:35p
loading...
/zigman2/quotes/203566176/composite
US : U.S.: Nasdaq
$ 22.12
-0.26 -1.16%
Volume: 2.46M
April 9, 2020 2:37p
P/E Ratio
11.58
Dividend Yield
0.00%
Market Cap
$3.77 billion
Rev. per Employee
$1.57M
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Shawn Langlois is an editor and writer for MarketWatch in Los Angeles. Follow him on Twitter @slangwise.

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