When any given stock trades at a steep discount to its true value, all too often, it’s for a good reason. But sometimes, the market either gets it wrong or briefly offers investors a rare window of opportunity to pick up shares of great businesses for far less than they’re worth.
So, we asked three top Motley Fool contributors to each discuss a stock that they believe is absurdly cheap right now. Read on to learn what they had to say about JD.com (NASDAQ:JD), Apache Corporation (NYSE:APA), and Baidu (NASDAQ:BIDU).
A compelling value in China if this cloud is lifted
Steve Symington (JD.com): Down 37% so far in 2018 and trading at just 0.6 times trailing-12-month revenue, shares of Chinese e-commerce leader JD.com have been absolutely hammered by a combination of U.S.-China trade tensions and — much more troubling — the arrest late last month of its founding CEO, Richard Liu, on an allegation of sexual assault in Minneapolis.
For perspective, Liu was released without bail and insists through his lawyers that he was falsely accused. Still, as of last Thursday, police had completed their investigation into the incident and passed it to prosecutors for review to determine whether he’ll be charged.
To be clear, I would be uncomfortable buying JD.com stock if I don’t believe in the morals of its executive leadership. And with a 16% stake in the company and 80% of its voting rights, Liu is widely considered a crucial piece of JD.com’s long-term success.
But if the allegation turns out to be baseless — and with the caveat that there will be a certain level of suspicion that will surround the company regardless — it should go a long way toward appeasing the market’s concerns that JD can indeed live up to its status as the so-called “Amazon of China…
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