Does Anyone Benefit from the Shutdown? 4 Rallying Chinese Stocks to Watch

Does Anyone Benefit from the Shutdown? 4 Rallying Chinese Stocks to Watch

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Obama has missed two major trips abroad as a result of the shutdown. Is it good news for China?

As debate swirls about the impact of the government shutdown – there's one country not adding much to the chorus of international leaders criticizing the impasse. In fact, despite the world's interconnectedness, some people are suggesting one country is actually benefitting from Washington dysfunction.

One of the byproducts of the shutdown is that President Obama isn't traveling as much. He cancelled a trip to Belgium to meet with economic leaders in the Eurozone, and he recently cancelled a trip to Indonesia to attend the Asia-Pacific Economic Cooperation Summit (APECS).

Now, while no one is saying that Obama has his priorities out of whack (it's safe to say most people want him here until the budget crisis is resolved), there could be some long-term consequences from missing out on these obligations.

For instance, the trip to Brussels was meant to finish hammering out a trade deal – generating jobs and revenue on both sides of the Atlantic. The EU's ambassador to the US even tweeted, "The EU is ready when you are!" Officials in the Obama administration insist that the deal will go forward once the furlough ends and the government can afford to staff a full team of negotiators. 

However, today Obama is missing another important trip, which will be harder to reschedule. The APECS is continuing without him, with China enjoying a much larger seat at the table. Part of America's strategy in the East has been to counter the growing influence of China – which is harder for America to do without it's President in the room. 

Investing ideas

To see how the market is responding to Obama's absence, we decided to run a screen on Chinese stocks traded on US exchanges. We looked for those companies performing well in the run up to the government shutdown, limiting our results to stocks trading above their 20-day simple moving averages (MA).

Next we screened for stocks that have been up over the course of the week – that is, during the shutdown. Finally, to get some perspective from outside politics, we only included those with an average rating of "Buy" or higher from top-side analysts. 

We were left with four stocks on our list.  

Click on the interactive chart below to see data over time. 

Can these stocks outperform while the US government can't even open it's doors? Use the list below as a starting point for your own analysis. 

1. Huaneng Power International Inc. (HNP, Earnings, Analysts, Financials): Engages in the generation and sale of electric power to the regional or provincial grid companies in the People's Republic of China. Market cap at $14.3B, most recent closing price at $40.71.

P/E Ratio: 9.79.

Trading 1.47% above its 20-day MA.

The stock has moved up 1.48% during the second week of the US Government Shutdown.

 

2. PetroChina Co. Ltd. (PTR, Earnings, Analysts, Financials): Produces and distributes oil and gas in the People's Republic of China. Market cap at $202.59B, most recent closing price at $110.69.

P/E Ratio: 10.54.

Trading 1.81% above its 20-day MA.

The stock has moved up .3% during the second week of the US Government Shutdown.

 

3. Vimicro International. (VIMC, Earnings, Analysts, Financials): Engages in the design, development, and marketing of mixed-signal semiconductor products. Market cap at $47.94M, most recent closing price at $1.82.

P/E Ratio: 7.91.

Trading 18.86% above its 20-day MA.

The stock has moved up 27.27% during the second week of the US Government Shutdown.

 

4. China Zenix Auto International. (ZX, Earnings, Analysts, Financials): Engages in the research, development, production, and sale of commercial vehicle wheels to aftermarket and original equipment manufacturers. Market cap at $203.92M, most recent closing price at $3.98.

P/E Ratio: 5.69.

Trading 6.13% above its 20-day MA.

The stock has moved up 7.86% during the second week of the US Government Shutdown.

 

 

(List compiled by James Dennin. Analyst ratings sourced from Zacks Investment Resaerch, all other data sourced from Finviz.)

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