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In August, China’s e-commerce giant PDD Holdings (PDD) warned that growth would slow. Bargain hunters took advantage of the stock’s fall, sending shares from below $90 to over $140. The rally did not last, as PDD stock closed at $96.35 on November 29, 2024.
Selling worsened after PDD posted Q3 results on November 21. Despite revenue growing by 44% to $14.16 billion, stock markets expected more. Revenue growth will continue to decline in the quarters ahead. PDD faces severe trade restrictions, tariffs, and rising competition from domestic Chinese firms.
Advance Auto Parts (AAP) traded around $45 before closing at $41.50. Automotive parts suppliers will underperform in 2025 and beyond as the U.S. plans to impose tariffs on its trading partners. Investors should be wary of Aptiv (APTV), Magna International (MGA), and BorgWarner (BWA).
StoneCo (STNE), a Brazil-based fintech, is on a downtrend that started in March. The firm reported a stronger payment volume in the third quarter. The firm reaffirmed its 2024 guidance, expecting an adjusted net income of over R$1.9 billion. This growth is not enough to impress shareholders.
In the retail sector, avoid Dollar Tree (DLTR). Though shares may break their yearlong downtrend, the stock does not have enough momentum. Fundamentally, growth is absent. As competition in the retail sector worsens, DLTR stock may underperform.
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