Where Is Bitauto (NYSE: BITA) Stock Headed in 2015?

bita stock

bita stockBitauto Holdings Ltd. (NYSE ADR: BITA) is a leading Chinese e-commerce company that operates like an online showroom for car dealers. It sells online advertisements and provides reviews, pricing info, and other data for consumers.

Over the last two years, BITA stock has smashed the S&P 500 by 242%. It's up more than 273% since hitting the U.S. market in November 2010.

But BITA stock has seen a huge sell-off in the last year. Shares are down 3.7% since July 2014, and 36.1% in the last six months. In fact, the BITA stock price just closed at a 52-week low of $45.01 yesterday (Tuesday).

Here's what has caused Bitauto stock's yearlong tumble...

China's Economic Influence on the BITA Stock Price

Shares of Bitauto have become less attractive to American investors for one obvious reason - China's stock market is in the midst of a sell-off.

Earlier this year, China's stock market was showing warning signs of a bubble. The country's benchmark Shanghai Composite Index gained nearly 40% between March and June.

On June 12, the index closed at a seven-year high of 5166.35. The last time it closed near those levels was Oct. 12, 2007, when it settled at 5903.264. It ended up plunging 64% less than a year later.

China's market rally over the last year and a half came when the country's wider economic growth was slowing. After all, China's GDP growth decreased from 7.7% in 2013 to 7.4% in 2014. According to the International Monetary Fund (IMF), that growth is supposed to slow to 6.8% this year.

"China's stock market had become detached from reality of China's own economy, and appallingly overvalued," said Patrick Chovanec, managing director at Silvercrest Asset Management, in a tweet yesterday. "This is gravity taking effect."

The situation only seems to be getting worse. The Shanghai Composite Index has lost 30% of its value in just the past three weeks. BITA stock is down 17.4% over the same time.

With all of this bearish news from China weighing down BITA stock, investors are wondering what's next for the BITA stock price. Here's the full answer...

Will the BITA Stock Price Rebound in 2015?

BITA stock is one of our favorite long-term picks. That's because it's a play on the expanding automotive market.

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According to Money Morning Defense & Tech Specialist Michael A. Robinson, the automobile industry is undergoing a massive shift. It's now merging with another exploding industry - technology.

"Cars today are brimming with advanced technology," Robinson noted. "A wide range of exciting new tech features - everything from advanced sensors to software to GPS to web and Bluetooth integration - are helping the auto industry rack up new sales records."

The best part about BITA stock is it also ties into the Chinese e-commerce industry, which is exploding at an unprecedented pace...

In 2013, China became the world's largest e-commerce market when it reached $298 billion. That marked a 60% increase from the year before and surpassed the United States' $263 billion e-commerce market.

"E-commerce in China is projected to hit $540 billion by 2015, and that's just for starters," said Money Morning Executive Editor Bill Patalon. "By 2020, China's e-commerce market will be worth more than the United States, the United Kingdom, Japan, Germany, and France combined. So we know that growth is coming."

Analysts expect BITA stock to soar alongside the two booming markets. Yahoo! Finance has a one-year target estimate of $73.03 a share. That's a huge 62.3% increase from BITA's July 7 close of $45.01.

The Bottom Line: Investors worried about China's foundering stock market have sent the BITA stock price much lower this year. But Bitauto is poised for a strong rebound throughout the rest of 2015, as the auto industry continues to innovate and China's e-commerce market rapidly expands.

Follow me on Twitter: @AlexMcGuire92

More on Auto Stocks: Ford Motor Co. (NYSE: F) stock has had a lackluster year. The iconic American car company is down 4.2% in 2015. But don't let that scare you off - the automaker is on track to having one of its best years ever. Here's why F stock is headed for a rebound...

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