Eastern Gems

The potential of China has rarely been disputed. As the world's most populous nation, the only real question has been when the country will get up to speed with the rest of the world and whether or not most of its residents will reap the benefits of modernization.

But Internet companies aren't known for their patience. They are ready to buy into the future now. Last week it was Amazon (Nasdaq: AMZN  ) acquiring online retailer Joyo.com. Earlier this year eBay (Nasdaq: EBAY  ) scooped up Chinese auction site EachNet. Yahoo! (Nasdaq: YHOO  ) didn't buy SINA (Nasdaq: SINA  ) , but it did team up with a popular Chinese portal to launch an auction site earlier this year.

SINA, along with rivals NetEase.com (Nasdaq: NTES  ) and SOHU (Nasdaq: SOHU  ) , offer an interesting collection of volatile equities. Over the summer I argued that all three possessed bargain valuations, despite the obvious political and economic risks.

While the companies have had to reshuffle their priorities as the wireless premium services market has taken a hit, they are still growing. With fat margins and neglected share prices, one could argue that they are also worthy Hidden Gems candidates.

Yes, there are plenty of compelling stateside opportunities for the newsletter to consider. Going by some of its winners, such as the near tripling of last year's Middleby (Nasdaq: MIDD  ) selection, one can argue that you don't really have to venture beyond your own borders to find great stocks.

While that's true, with the clear mandate this year that American companies are interested in buying up Chinese online players, it seems to give the undervalued portals another potential catalyst to get their share prices climbing again. After all, in mining for gems, it's important to remember that many of the world's greatest jewels have been unearthed overseas.

Do you invest exclusively in stateside companies, or do you favor having some global diversification? Are the Chinese portal upstarts really worthy to be singled out asHidden Gems? Why China? All this and more in the China Connection discussion board. Only on Fool.com.

Longtime Fool contributor Rick Munarriz thinks that current passports make better investors. However, he does not own shares in any of the companies mentioned in this story.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 501155, ~/Articles/ArticleHandler.aspx, 12/22/2014 12:13:35 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement