Gainers📈 & Losers📉

Our Biggest Gainers & Losers of the Day in the $100,000 Build Portfolio

For the 10th December 2024:

• My Favourite Chinese Stock 🐉

• Profit from Fine Art 🎨 

• Cloud’s Poppin’, Stock’s Droppin’ 🍾

• Smart Home Money 🧠 🏠️ 

My Favourite Chinese Stock 🐉 

Yesterday I spoke about China’s big move. Today, I want to tell you about my favourite Chinese stock.

Ever heard of PDD Holdings? No? Well, strap in. You’re gonna love it.

Here’s the punchlines to bring you up to speed.

• Chinese e-commerce giant growing revenue faster than the speed of light.

• Founder-run with 32% insider ownership (AKA, the owners are playing with their own money).

• Gross margins at a disgusting 62%.

• $43 billion in cash just chilling on the balance sheet

Right, now you’ve got all that let me give you the deep dive.

WHO TF IS PDD HOLDINGS?

They’re actually behind two e-commerce bangers. One is Pinduoduo, the other is Temu.

I wouldn’t blame you for not knowing about Pinduoduo. If you said “huh?” to Temu, then you need to stop doing your Patrick Star impression & come out from under that rock. They’re everywhere. Even if you don’t buy from them, you’ve definitely seen the ads.

Here’s what you need to know about the two:

1. Pinduoduo (PDD): Think Costco meets TikTok, but for China. Users team up to buy in bulk for discounts. The result? 637M active users & 16M farmers skipping the middleman. Farmers make more, users pay less, PDD cashes in. Everyone wins. 🥦💸

2. Temu: Operating in 79 countries, it’s been downloaded more than TikTok this year. Insane. It’s like a trendier version of Aliexpress. Cheap, easy to use, & spending BIG on ads to lock in users.

WHY SHOULD YOU CARE?

Because this powerhouse is grossly undervalued at $104.

First, lets take a look at the revenue. Last quarter, they clocked in a massive 44% YoY growth. That’s amazing but investing can be a “what have you done for me lately?” game so what does the future look like?

Analysts are forecasting 28% forward growth. The competition are solid companies & their numbers don’t even come close. JD.com’s crawling along at 5% & Alibaba’s managing a modest 8%. PDD is the Usain Bolt of Chinese e-commerce & everyone else is getting left in the dust. 🏃‍♂️💨

With PDD trading at $104, that means they’re being valued at 8x forward earnings. For context:

• JD.com: 8x earnings, but only 5% revenue growth.

• Alibaba: 8.8x earnings, 8% revenue growth.

• PDD: 8x earnings, 28% revenue growth.

You see the disconnect, right?

Then there’s the margins. Over 60% gross margins. These numbers leave me scratching my head asking “how is this even possible?!” but they’re doing it.

There’s chatter about margins dipping slightly as PDD invests more in its producers. With revenue growth like they’ve seen, any small dip in margins will likely be outpaced.

SKIN IN THE GAME 

If you’re going to invest in a company, who would you most like to see in charge?

Some overpaid CEO who’s been brought in? Or what about a team of faceless execs with a decent track record?

If I had the choice, I’d go with a founder who’s built the company with his own blood, sweat & tears. That’s exactly what we have at PDD.

Colin Huang, (former Google engineer), built PDD from scratch. Between him & the rest of the management team, they own 32% of the company. I think that should be enough incentive for them to make decisions for the greater good of PDD.

RISKS TO KEEP AN EYE ON 👀

As much as I love Chinese stocks, Asia & volatility go hand in hand. Here’s some things to keep in mind if you want to take a swing at PDD.

• Margin Compression: If costs rise faster than revenue, profits could take a hit.

• Delivery Wars: JD.com has a killer delivery network. PDD can’t compete on speed just yet so could see them falling behind

• Geopolitics: The CCP can meddle with stocks & policies whenever they feel like it. They just announced plans for a big stimulus move which is great. It doesn’t mean they won’t pull a move we won’t love in the future.

MY PLAN 🗺️ 

Hold my hand through my train of thought.

A company growing at 28% forward…
With 30% of its market cap in cash…
Trading at 8x earnings…
While its competition is crawl along at single-digit growth.

I think it’d be criminal not to up my exposure here. I like to buy PDD anytime it’s around $100/share. My average buy is $110 so the current price will help me average down.

My first price target is $150 which we’ve already seen a few times this year. That’d bag a 44%+ profit.

If you’re into e-commerce plays or want to add some China exposure to your portfolio, I can’t see a better chance than this coming up for a while.

Profit from Fine Art 🎨

Billionaires wanted it, but 66,737 everyday investors got it first… and profited

When incredibly rare and valuable assets come up for sale, it's typically the wealthiest people that end up taking home an amazing investment. But not always…

One platform is taking on the billionaires at their own game, buying up and offering shares of some of history’s most prized blue-chip artworks for its investors. In just the last few years, those investors realized representative annualized net returns like +17.6%, +17.8% and +21.5% (among assets held 1+ year).

It's called Masterworks. Their nearly $1 billion collection includes works by greats like Banksy, Picasso, and Warhol, all of which are collectively invested in by everyday investors. When Masterworks sells a painting – like the 23 it's already sold – investors reap their portion of any profits.

It's easy to get started, but offerings can sell out in minutes.

Our readers can skip the waitlist to join with this exclusive link.

Past performance not indicative of future returns. Investing Involves Risk. See Important Disclosures at masterworks.com/cd.

Cloud’s Poppin’, Stock’s Droppin’ 🍾

Oralce are my biggest loser today. What did they do to wipe out a month of gains in one session?!

Well, they dropped their Q2 earnings & it wasn’t exactly the mic-drop analysts were hoping for. But there is some silver lining to this cloud.

Cloudy with a Chance of $$$ 💸

Oracle’s cloud business is putting in WORK. Current remaining performance obligations (basically the revenue they’ve locked in for future quarters) grew 20% YoY. That’s up from 18% last quarter & makes it the fourth straight quarter of accelerating growth. 📈

That level of consistency means their cloud & AI services aren’t a one hit wonder.

Big players like Meta, NVIDIA, & Cohere are using Oracle’s AI infrastructure, which has left some analysts weak at the knees & bumping price targets to $210 (from $185) & maintaining an overweight rating.

That’d leave us with an 18.5% profit from current price.

The “Meh” Stuff 💔

So if some analysts are weak at the knees why is the stock falling?

Oracle’s guidance for next quarter came in soft. They told us $1.50–$1.54 EPS & the general expectation was it’d be somewhere around $1.57. Revenue is expected to grow 7–9% but I think oracle have just been a victim of Wall Street’s high expectations so left investors a bit underwhelmed.

The Bright Side 🌤️ 

If I’m honest, other than marginally falling short on expectations, I think the future looks positive.

• Their cloud infrastructure is expected to grow 50%+ next quarter. 🔥

• AI demand is going nuclear. Oracle’s multi-cloud strategy (partnering with the big hyperscalers) is helping them cash in.

• Mizuho’s Siti Panigrahi raised their price target to $210, calling the recent dip a “buying opportunity.”

Even KeyBanc’s Jackson Ader is staying bullish, saying Oracle’s bookings momentum and SaaS growth are still on track heading into 2025.

Is Oracle a Buy? 🤷

This is a classic “buy the dip” story for me.

My current position in Oracle is up by about 7% but this sharp drop is a perfect time to add a little size.

The AI & cloud projections look healthy, respected analysts are bumping price targets & technically price has already started consolidating.

Yes please, I’ll have some more.

Smart Home Money 🧠 🏠️ 

$10 Million in Revenue, Explosive Growth—RYSE Is Redefining the Smart Home

The smart home market is evolving, and RYSE is leading the way with their groundbreaking SmartShades technology. With over $10 million in total revenue, 200% month-over-month growth, and partnerships with major retailers like Home Depot, Lowe’s, and Blinds.com, RYSE is scaling rapidly in a market projected to grow 23% annually.

What makes RYSE unique? Their 10 fully granted patents and cutting-edge automation solutions allow homeowners to transform ordinary window coverings into sleek, smart devices without replacing their blinds or shades.

At just $1.75 per share, this is your chance to invest in a company with proven traction and enormous potential for growth.

Don’t miss out—invest in RYSE today.

That’s all! See you same time tomorrow 👋 

P.S Hit reply & let me know what you thought of today’s newsletter. All feedback is welcomed ❤️