4. Alibaba Group Holding Limited (NYSE:BABA)
Number Of Hedge Fund Investors: 107
Thomas Hayes from Great Hill Capital said in a recent program on Schwab Network that he’s been invested in Alibaba Group Holding Limited (NYSE:BABA) for about two years and still believes it’s a “no-brainer” stock to buy amid several growth catalysts.
“We’ve been in Baba for almost two years now, and we are more investors than traders. So we’ve bought in the hundreds and we bought a ton in the 60s, so our base is around $83. This is an absolute no-brainer. We look at intrinsic value—we think it’s well in excess of $200 per share. This is the number one cloud provider in China. Obviously, you had the announcement yesterday that Apple is going to be using Alibaba AI for Apple Intelligence, which was big news but only part of the story here. Complete play on the middle-class recovery with Taobao and T-Mall, as the one and a half years of non-stop stimulus is starting to kick in the economy. International growing up 40%. Any weakness in the coming months is an opportunity to buy for the long term.”
Conventum – Alluvium Global Fund stated the following regarding Alibaba Group Holding Limited (NYSE:BABA) in its Q3 2024 investor letter:
“On 24 September the People’s Bank of China unveiled a massive three part stimulus package involving: (1) slashing the amount of cash banks need to hold in reserve and lowering the main policy interest rate; (2) cutting mortgage rates on existing home loans by 0.5% and reducing down payment requirements for second homes from 25% to 15%; and (3) supporting equity markets by a USD 114b lending pool to encourage companies to buy back shares and non-bank financial institutions to buy local equities (which may be expanded by the same amount two more times)5 . We are flabbergasted. But we shouldn’t be. After all, these types of arrangements have been all too common over the last 15 years. The local equity markets responded with gusto, and for the last week of the quarter the CSI 300 Index (Shanghai and Shenzen listed companies) was up 25.1%. Alibaba Group Holding Limited (NYSE:BABA) was not lost in all this, and returned 26.8% over that one week period. But Alibaba had already performed well so during the whole September quarter it was up a staggering 56.0%. As a result, Alibaba is no longer the cheap stock it once was. It now trades at a premium to our valuation – a valuation which admittedly had been progressively reduced over our holding period as a result of deteriorating business fundamentals. As a result of Alibaba’s significant outperformance, by the end of the quarter it had reached 3.7% of the Fund. We are weighing up our options here, considering the relative risk.”
