[Editor's Note: We're sharing this Private Briefing with you because Bill has found a simple, lucrative way to get into the biggest, fastest-growing market on Earth. You'll love this play. Here's Bill...]
Mainland China has leapfrogged the United States to become the biggest e-commerce market on Earth.
We wanted you to hear about some of the best new opportunities.
So you can reap the biggest payoffs…
These Will Be Some of the Biggest Winners
But the biggest winner is Bitauto Holdings Ltd. (NYSE ADR: BITA), a leading e-commerce player focused on China's surging auto market.
Radical Technology Profits Editor Michael Robinson told us about Bitauto in the February Private Briefing report "Detroit + Silicon Valley + Beijing = One Heck of a Profit Play."
By mid-day Friday, Bitauto shares had jumped to $62.11. That gave us a peak gain of 109% from our recommendation price of $29.66. And it makes Bitauto the 32nd recommendation to give you a triple-digit gain (double or better) since we launched Private Briefing back in August 2011.
"When you look at this stock, it is capitalizing on three intersecting trends – each of which is strong on its own," Michael said earlier this week. "And when you combine them – and find one company or one stock that is positioned to benefit from all three – well, that's one very powerful profit play. And that's just what we have with Bitauto."
The three "intersecting trends" Michael referred to are easy to identify. The first is China's overall economic growth. The second is the strong outlook for that country's auto market. And the third is the Asian giant's surging e-commerce market.
And over time, China's e-commerce market is only going to get bigger.
Let's take a look.
Going and Growing
A number of China-listed shares hit new highs early last week because of expectations that the Red Dragon's economy is heating up. The benchmark Shanghai Composite Index rose 7.48% in July, while its counterpart Shenzhen Component Index advanced 8.36% – the biggest monthly increases in two years.
The non-manufacturing Purchasing Managers' Index was 54.2 in July, down slightly from 55 in June, according to the Beijing-based National Bureau of Statistics and China Federation of Logistics and Purchasing. Readings of 50 and above represent an expansion.
Investors were showing optimism that the government is accelerating state-owned enterprise reform and relaxing rules to help brokerages free up capital for expansion.
In a forecast last week, the International Monetary Fund (IMF) predicted that China's growth rate will slow to 7.1% next year from a projected 7.4% this year. It based those predictions on the assumption that Beijing will continue to transition from an all-export economy to one that's more focused on domestic consumer demand.
Those growth rates are down substantially from where they were a decade ago. But they're still double the U.S. rate of growth. (Even the higher-than-expected U.S. growth rate of 4% for the second quarter was "padded" – 1.7% of that was due to "refilling the channel," not to "sell-through" to the consumer.)
Analysts continue to worry about speculation in China's real estate market, the potential for a banking crisis, and the need for enterprise reform. So expect that country to be volatile. Even so, the higher growth rate represents opportunity, meaning we want to have some money deployed there.
And let's face it: Given what happened in this country with housing, credit-default swaps, and credit just a few years ago, even developed markets aren't without risk.
Mashing the Accelerator
About the Author
Before he moved into the investment-research business in 2005, William (Bill) Patalon III spent 22 years as an award-winning financial reporter, columnist, and editor. Today he is the Executive Editor and Senior Research Analyst for Money Morning. With his latest project, Private Briefing, Bill takes you "behind the scenes" of his established investment news website for a closer look at the action. Members get all the expert analysis and exclusive scoops he can't publish… and some of the most valuable picks that turn up in Bill's closed-door sessions with editors and experts.