Tencent Holdings Limited (TCEHY)

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Where Fundamentals Meet Technicals: TCEHY
By: Lyn Alden Schwartzer | September 1, 2021

This issue of “Where Fundamentals Meet Technicals” looks at two growth stocks and one commodity stock.

Tencent: Decision Time

Tencent (TCEHY) is a diversified corporation that operates China’s biggest social networks, one of the two main Chinese payment platforms, and a global gaming business. They hold stakes in companies like JD (JD) and Sea Ltd (SE), as well as many other companies around the world.

And like most Chinese companies, especially tech/media companies, their stock has been utterly destroyed by a major government crackdown on the industry, along with a downturn in China’s credit cycle. Sentiment on China is about as bad as it gets.

In terms of valuation, the stock bounced off the all-time low valuation level that it reached a few years ago when the Chinese government stopped approving its games for a year:



The F.A.S.T. Graph shows either 1) analysts are wrong about their earnings forecasts, or 2) the stock is undervalued:



Garrett’s chart shows a potential bottom in place, and writes, “breaking above the Aug high would be the first indication of a near-term trend change since the C-wave down started.”



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