| Stock (Symbol) | Stock Price | |
Autohome (ATHM) |
$45 |
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| Data is as of | Expected to Report | Sector |
| June 5, 2015 | Aug 5 – Aug 10 |
Technology |
| Sharek’s Take | ||
 Autohome is China’s largest auto website for consumers, doing five times the revenue BitAuto is. In fact, I bought ATHM because we had so much success with BitAuto stock. But unlike BitAuto, Autohome is now delivering profit growth even as it invests heavily in advertising and technology. Here’s some stats from last qtr, year-over-year comparisons:
I like this stock a lot, its in both the Aggressive Growth Portfolio and Growth Portfolio. In a year where most Chinese stocks I follow have poor profit growth because they are spending to grow, ATHM is spending to grow and is still expecting 35% profit growth. For 29 times earnings this stock is undervalued. I think this $45 stock is worth $63 now, $84 next year. |
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| One-Year Chart | ||
 This stock was going on a tear, I thought it was going to leave me behind, so I got my clients in at $51. Of course it then sold off. Still, I’m happy with this investment. Est LTG of 34% and a P/E of just 29. Solid profit growth along the bottom. |
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| Earnings Table | ||
 Last qtr sales increased 82%, way above expectations, but profits grew just 40% as the company spent to grow.ATHM beat by a couple of cents but it beat by 12 cents the qtr earlier, and I’m sure this qtr didn’t impress investors. Annual Profit Estimates rose but not as much as the qtr earlier. I bet this took some air out of the tires. Management guided NxtQtrEst higher, but analysts only upped a penny. Profits look to grow a healthy 30% on avg the next 4 qtrs. |
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| Fair Value | ||
 As I mentioned earlier, this stock has great potential. Some things that could derail it are (1) overspending to grow and thus hurting profit growth and (2) a crash of the ultra-high Chinese stock market. |
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| Ten-Year Chart | ||
 Stock is trending up but in a volatile manner. Profits have grown steadily since the IPO in December 2013. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
8 of 23 |
In a year when many Chinese Internet stocks are not growing profits rapidly because they are spending to grow, Autohome is getting both jobs done. I like this stock a lot. Risks are it could increase spending and the Chinese stock market has gone parabolic and could come down hard. |
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Aggressive Growth Portfolio
6 of 9 |
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