3 China Stocks That Got Slammed in July

Yingli Green Energy Hold. Co. Ltd. (ADR) (NYSE:YGE), Kandi Technologies Group Inc (NASDAQ:KNDI), and Baidu Inc (ADR) (NASDAQ:BIDU) are set to wrap up a dismal month

by Karee Venema

Published on Jul 31, 2015 at 11:09 AM

It was an absolutely dismal month for mainland stocks -- with China's Shanghai Composite logging it's largest monthly percentage drop since August 2009. The effect was felt by a number of U.S.-listed Chinese securities, including alternative energy issue Yingli Green Energy Hold. Co. Ltd. (ADR) (NYSE:YGE), electric car concern Kandi Technologies Group Inc (NASDAQ:KNDI), and search engine giant Baidu Inc (ADR) (NASDAQ:BIDU).

Not even a mid-July rally was able to save YGE from its steep monthly losses. In fact, the shares are poised to close out July with a 28% loss. What's more, the security has closed 15 of the past 21 sessions in penny-stock territory, and was last seen lingering near $0.88.

Against this backdrop, sentiment has been skewed toward the skeptical side. All of the analysts covering Yingli Green Energy Hold. Co. Ltd. maintain a tepid "hold" rating. Elsewhere, short sellers have been enjoying the fruits of their labor, with short interest accounting for a healthy 9.2% of the stock's available float.

Unlike its U.S. counterpart, KNDI has had a terrible year. Specifically, the shares have surrendered 48% of their value in 2015 -- and 20% in July alone. In fact, the stock bottomed at a new annual low of $6.68 on Tuesday, but was more recently seen hovering around $7.25.

In the options pits, speculators have been quick to initiate long puts over calls in recent months. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Kandi Technologies Group Inc's 50-day put/call volume ratio of 0.60 sits just 13 percentage points from a 52-week peak.

BIDU is set to end July with a 12.5% deficit -- a loss only exacerbated by Tuesday's poorly received earnings report (which sent the shares tumbling to an annual low of $162). Longer term, the stock has given back 31% since topping out at a record high of $251.99 last November, and was last seen trading near $174.26.

Nevertheless, short-term speculators have rarely been as call-skewed toward Baidu Inc as they are now. The stock's Schaeffer's put/call open interest ratio (SOIR) of 0.60 sits below 98% of all comparable readings taken in the past year. Outside of the options pits, the majority of analysts maintain a "strong buy" toward the underperformer, with not a single "sell" to be found. Should BIDU continue to struggle, an unwinding of optimism could apply additional pressure.

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