Alibaba a Compelling Investment Opportunity

After our last announcement last week for the 4th pick as Alibaba (stock ticker: BABA), we doubled our quantity this week on Alibaba. We did further detailed analysis on the same and we still see Alibaba as a potential investment opportunity where currently trading at $90. Alibaba has high potential for doubling its price in the coming 2-3 years as it is unique within a wide range of stock market opportunities. Tomorrow is the planned conference call which will be conducted by Alibaba for its quarter financial release and its update.

To complete in our transparency, below is our current portfolio stand where we are beating two indexes, but not S&P and Nasdaq which we are targeting in current picks. Our portfolio in blue.

We really found many unique aspects in Alibaba that it is really rare and remind us about Meta few months when it was trading at $100 and now around $240. We will summarize these aspects as below.

1. Yearly large growth company with profit setting the company at expected PE around 10. This by itself is rare. There are potential growing companies in revenues, but still not creating profit and trading in high future suspected earnings and sometimes turn to profits doesn’t happen. If the company is within high growth and profitable, it will be trading in 30x PE like Amazon. For Alibaba, excluding the last year unsuspected conditions, actually Alibaba is trading below 10x suspected PE for 2023. This condition by itself set the fair price of Alibaba above $200.
2. High drop from a top. Usually good stocks doesn’t give the opportunity easily to buy and when the opportunity comes, it will be with the whole market down, making the whole market an opportunity. Global markets are high and Alibaba is down to its initial traded price !
3. The company is among the largest with high cash and high ambitions and great known leadership. Leadership is very important even than the price of the stock. Alibaba management had proven their great innovations. The cash of Alibaba exceeding $75 with high abilities to make the company grow more and more.
4. The area of the company is attractive. Do you know that normal shopping retailers growing revenues yearly because the requirement itself is in growth. The online retailers are even growing in faster growth.

Below yearly growth of revenues per year as presented from Google. Same for net income excluding the last year special conditions. It is suspected that Alibaba will generate $10 earning per share for 2023, setting its current PE to 9 at $90 !

Alibaba Group Holding Ltd., is a leading multinational conglomerate specializing in e-commerce, technology, with various online platforms with dominant market position, strong financial performance, diversified business segments, and potential growth opportunities. Baba has established itself as a dominant player in the e-commerce industry, particularly in China, where it holds a significant market share. The company operates several online platforms, including Alibaba.com, Taobao, Tmall, and AliExpress.

Baba’s financial performance has been consistently robust, reflecting its ability to generate substantial revenue and profitability. The company’s revenue growth has been impressive. The company has strategically expanded into areas such as cloud computing, digital entertainment, logistics, and financial services, among others. This diversification not only enhances revenue streams but also mitigates risks associated with reliance on a single sector.

Baba’s global reach is another compelling aspect of its investment potential. The company has actively pursued international expansion through acquisitions, partnerships, and investments. The company leverages artificial intelligence, big data analytics, cloud computing, and other cutting-edge technologies to enhance user experience, optimize operations, and drive business growth.

Risks and Challenges

Like any investment, Baba stock carries inherent risks and challenges. Regulatory uncertainties and geopolitical tensions can impact the company’s operations, particularly in China and international markets. Competition within the e-commerce industry is fierce, and maintaining market dominance may require sustained investments in technology, logistics, and marketing. Beside, macroeconomic factors and currency fluctuations can influence Baba’s financial performance.

Conclusion

It is very rare to find amazing combination of opportunities in a stock, for us we see Alibaba as a gold as long as it is below $120 and that will be further clarified after tomorrow conference. It is the first pick where we picked twice in our portfolio at $85 last week and $90 this week. Baba stock represents a compelling investment opportunity due to its dominant market position, strong financial performance, diversified business segments, international expansion, technological innovation, and significant growth prospects. While risks exist, Baba’s ability to navigate challenges, adapt to market dynamics, and leverage its strengths position it favorably for long-term success. Investors seeking exposure to the e-commerce industry and the rapidly