Group 1 - JD.com, Inc. is considered one of the undervalued cyclical stocks to invest in, with a Buy rating reiterated by Benchmark Co. at a price target of $38, while Citi lowered its price target from $44 to $37 [1][2] - Benchmark analysts noted that despite the bullish sentiment, they have lowered fiscal fourth quarter 2025 estimates due to significant growth challenges, including the phasing out of trade-in program benefits and consumer spending pressures [2][3] - The ongoing investments in food delivery are expected to trigger profitability setbacks for JD.com, although fiscal 2026 estimates have been maintained, indicating a slow start to 2026 due to persistent challenges [3] Group 2 - JD.com is one of China's largest e-commerce and technology companies, operating an extensive online retail platform supported by advanced logistics, supply chain management, and cloud services [4]

Core Viewpoint - The article discusses the identification of 10 undervalued cyclical stocks for investment, emphasizing the potential for growth in the consumer cyclical sector and the importance of hedge fund interest in these stocks [1][5][6]. Market and Economic Outlook - Alan McKnight from Regions Wealth Management indicates that the consumer sector remains strong, with earnings performing well, suggesting a healthy market and economy [2]. - Richard Bernstein highlights that 2026 may present different investment opportunities, recommending dividend-paying stocks and international diversification due to the outperformance of international markets compared to the US market in 2025 [2][3]. Stock Selection Methodology - The list of 10 undervalued cyclical stocks was curated using the Finviz stock screener, Seeking Alpha, and Insider Monkey's Q3 2025 database, focusing on consumer cyclical stocks with a forward P/E ratio under 15 [5]. - Stocks were ranked based on the number of hedge fund holders, as research indicates that mimicking top hedge fund picks can lead to market outperformance [6]. Individual Stock Analysis - **Trip.com Group Limited (NASDAQ:TCOM)** - Forward P/E Ratio: 11.77, with 37 hedge fund holders - The stock has gained over 22% in the past 6 months, with Wall Street projecting a 16% upside [7]. - Recently partnered with Galaxy Asia Car Rental to enhance visibility in Malaysia, a market experiencing triple-digit growth year-over-year [8][9]. - The partnership aims to integrate global planning with local execution, capitalizing on rising regional demand [9][10]. - **PulteGroup, Inc. (NYSE:PHM)** - Forward P/E Ratio: 10.84, with 42 hedge fund holders - Wall Street has mixed opinions, with RBC Capital maintaining a Hold rating and lowering the price target from $112 to $111, while Citizens maintains a Buy rating with a $145 price target [11][12]. - RBC Capital expresses caution regarding the housing sector due to affordability challenges, while Citizens highlights the company's focus on move-up and adult buyers, which may mitigate the impact of mortgage rate volatility [12][13]. - PulteGroup generates approximately two-thirds of its annual sales from these buyer segments, providing a competitive edge [13][14].