10 Best Low Volatility Stocks to Invest in Now

6. Alibaba Group Holding Limited (NYSE:BABA)

Number of Hedge Fund Holders: 91

5-year Beta (Monthly): 0.34

Alibaba Group Holding Limited (NYSE:BABA) provides technology infrastructure and marketing services to support merchants, brands, and retailers in China and globally. The company operates across several key segments. The company also offers cloud solutions, digital mapping, and productivity tools, plus a range of e-commerce and marketing services across various global platforms.

Two main themes are affecting Chinese stocks such as Alibaba (NYSE:BABA). First, investor wariness stems from the Chinese government’s unpredictable interventions, as seen when Alibaba’s (NYSE:BABA) stock dropped from around $350 to under $100 after regulatory actions three years ago. Second, U.S.-China tensions add pressure, with tariffs and tech restrictions slowing China’s economy, casting doubt on reported growth rates.

Since 2022, its net income has stagnated, suggesting either economic slowdown or competitive challenges. In September, hopes rose for major Chinese government stimulus, briefly lifting Chinese stocks, but gains faded due to limited follow-through.

Between November 4 to 8, China’s National People’s Congress (NPC) Standing Committee is meeting in Beijing, where it unveiled a five-year, 10 trillion yuan ($1.4 trillion) package to address local government debt, with additional economic support anticipated next year. Normally, China’s fiscal budget is submitted by the finance ministry to the NPC in March for approval, but the NPC Standing Committee can authorize mid-year adjustments, including changes to the fiscal deficit, special treasury bond quotas, and local government debt limits.

In a September 26 interview with CNBC, David Tepper of Appaloosa Management shared his views on global markets, highlighting China’s aggressive fiscal and monetary stimulus, which includes measures to encourage consumption, stock buybacks, and offering low-risk borrowing for stock purchases. He sees these efforts as a strong boost for Chinese equities, which he views as undervalued compared to U.S. stocks. He sees China’s aggressive stimulus and undervalued equities as significant investment opportunities, while still remaining a little cautious.

Alibaba (NYSE:BABA) also seems to be one of the cheap undervalued Chinese stocks as it is trading at a forward PE ratio of 10.91x, a 37.76% discount to its sector median.