When it comes to new stock pick, there are some stocks that would normally catch my attention. IQIYI is the most recent pick that fits into my preference and here is why.
Relatively new IPO with an experience of shaken up. Emerging stocks listed in the U.S. market typically will have an open high and then shaking up to a low point, either well below its IPO price, or stop at IPO price. After that, there will be a long journey to crawling back. Check out Alibaba, Weibo, even Facebook. They all went through this pattern until only those investors who believe in the fundamental strength of them are majority of stock holder. Below is Alibaba chart that you can see the clear trending I described here.
Most people refer to IQIYI (IQ) as Netflix of China. It is a leading streaming company who provides Chinese content medias. This means it does not subject to tariff impact. However, given so many people are afraid of tariff definition, so any Chinese stock at this time is impacted to some extend. IQIYI has gone through the IPO last year, then hit peak and bottom within a year. It is building the solid ground and piercing through the resistance. In my other article “How to read news for your investment “, I have emphasized that when there is a great fundamental performance, but skewed by news that is not relevant, it is an opportunity to wait for correction. Eventually trade war will die down and news will be digested and accepted. This means we will see the stock price to match up its true value.