Negative sentiment on Chinese stocks compounded this week by hedge fund manager Ray Dalio masks "lots of opportunities" in pockets of the world's second-largest economy, two investors said Thursday.
"The more pessimistic everyone else is, the more opportunities there are to find misvalued, undervalued companies," said Jim Oberweis, president and portfolio manager at Oberweis Asset Management, in a CNBC "Power Lunch" interview.
While the Chinese economy has slowed down, investors are "premature" in thinking opportunities have dried up, added Karyn Cavanaugh, senior market strategist at Voya Investment Management.
In an investor letter obtained by CNBC, longtime China bull Ray Dalio's Bridgewater Associates noted that risk in China has increased and a popped stock bubble brought "significant losses for households." The firm added that Chinese policy has supported short-term prices but would be "slightly negative" for Chinese equity markets moving forward.