There is plenty to worry about if you’re investing in China -- from deteriorating relations with the U.S., to supply-chain turmoil, to slowing economic growth.
Bank of America strategists raise another point. “Russia's invasion of Ukraine may have increased the risk of a potential China-Taiwan conflict,” they wrote in a commentary.
“China-Taiwan poses a much bigger threat to the S&P 500 and global economy, given Taiwan's role in supplying over 90% of the world's advanced semiconductors.”
So BofA formed a list of the S&P 500 companies with the highest sales exposure to China as of 2020.
Here are the top 10 on the list.
Morningstar’s Take on Wynn Resorts
Morningstar analyst Dan Wasiolek assigns the company a narrow moat and puts fair value for the stock at $104. It recently traded at $59.51.
“The Macao government continues to heavily regulate VIP play, elevating long-term operational risk,” he wrote in a commentary.
“Wynn has outsize exposure to the expected long-term shift away from VIP gaming revenue toward non-gaming and mass play. Still, we see an attractive long-term growth opportunity in Macao, with Wynn's high-end iconic brand positioned to participate.”
Morningstar’s Take on Las Vegas Sands
Wasiolek gives this company a narrow moat too and puts fair value for the stock at $50. It recently traded at $34.51.
“Although the pandemic and government regulation continue to materially affect near-term demand in Macao (66% of estimated 2024 EBITDA), we still think Las Vegas Sands and the gaming enclave are well positioned for long-term growth,” he wrote in a commentary.
Morningstar’s Take on Qualcomm
Morningstar analyst Abhinav Davuluri assigns the company a narrow moat and puts fair value for the stock at $163. It recently traded at $131.60.
“We expect Qualcomm’s licensing business, the driver of the firm’s narrow moat rating, to continue generating solid cash flows, due to the ongoing ramp of 5G,” he wrote in a commentary.
“However, government investigations into the business model have increased the possibility of negative effects on royalty revenue.”