'Fast Money' Recap: Off to China
Stockpickr Staff
08/28/07 - 10:12 PM EDT
Editor's Note: The following is a recap of a 'Fast Money' show that originally aired on May 22.
The "Fast Money" crew takes an in-depth look at China and the best China-related investments.
Trading Chinese Stocks
Investors can buy a piece of China when they purchase ADR's (American Depository Receipts) without having to go to China to get the investment exposure. Eric Bolling's favorite ADR's in China is
Yanzhou Coal Mining (YZC Quote). Guy Adami likes
PetroChina (PTR Quote) because it recently found the largest oil field in China.
He also likes
China Mobile(CHL Quote) because it has as many subscribers as the U.S. has people. Pete Najarian also likes the mobile phone play, favoring
Baidu.com (BIDU Quote), which he believes is the next
Google(GOOG Quote) in China.
Jeff Macke likes video-game play
The 9 Limited (NCTY Quote), which recently signed a deal with
Electronic Arts (ERTS Quote).
The ETF's
The folks told investors who want to buy the entire Chinese market or who want to be in less-risky individual Chinese stocks to look at Chinese ETF's. Bolling likes the
iShares FTSE/Xinhua China 25 Index (FXI Quote) for a ETF play on the the nation.
Macke likes the liquidity in the Chinese ETF's, especially FXI. Najarian says if you're not ready to jump in head over heels into China, take a look at
Vanguard Pacific ETF (VPL Quote) because it will give market players exposure to other Asian countries along with China.
Trading China: Multinationals
If as an investors you're not interested in playing Chinese ETF's or ADR's, then you might just want to play China through U.S. multinationals. The crew offered some picks to play China with an American twist. Adami would play material stocks up until August 2008 when the Beijing Olympics begin.
Macke likes Electronic Arts. Bolling says China invested $3 billion into the
Blackstone(BLV Quote) IPO, which is great because the money will get invested back into the U.S.
Gaming the Beijing Olympics
The 2008 Olympic games will be held in Beijing. China has invested over $40 billion into making the city of Beijing a place to remember. Bolling says the hotel sector will be hot after the Olympics because if things look good on TV, people will want to go visit.
He likes
Wynn Resorts(WYNN Quote), which is opening 84 hotels in China. Macke would get long
Nike(NKE Quote).
Adami likes stocks such as
United Technologies (UTX Quote) because infrastructure will be a growth story through the Olympics.
Macau Trade
Macau, which is located about 40 miles southwest of Hong Kong, is quickly becoming the gambling powerhouse of the world. Recently
Las Vegas Sands (LVS Quote) opened up the Sands Macau the largest Casino in the world.
Gaming revenue for the region is at a remarkable $7 billion, which is higher then anywhere else in the world, including Las Vegas. Bolling says the way to play this gambling boom in Macau is to play slot machines.
He picked
International Game Technology(IGT Quote),
WMS Industries (WMS Quote) and
Bally Technologies(BYI Quote). Adami recommends buying
Starwood Hotels (HOT Quote), which is putting up properties in Macau and Vietnam.
Viewer Questions
Ben an American student in Beijing asked about what standards and practices U.S. investors assume Chinese companies will hold. Also he wondered about specific companies that stand out as leaders in this field. Adami says that U.S. companies are better run now that we have Sarbanes-Oxley.
He'd look for U.S. companies that have gone into business with Chinese companies, because "you can assume they did their due diligence." He gave as an example the partnership between Electronic Arts and The9 Limited.
James an American student in Beijing asked which of the big Chinese car companies will be most attractive to U.S. consumers considering Geely Motors' and Chery Automobiles' intention to sell cars in America. Adami says people in the U.S. love there SUV's and foreign sports cars. Play autos with auto-parts maker
Johnson Controls(JCI Quote), he said.
Final Trade For China
Macke likes International Game Technology and
Nike(NKE Quote). Najarian likes
MGM Mirage. Adami would buy
China Mobile (CHL Quote) for a play on wireless in China. Bolling recommended
Home Inns & Hotels Management(HMIN Quote).
