5 Best ADR Stocks To Buy Now

Page 5 of 5

1. Alibaba Group Holding Limited (NYSE:BABA)

Number of Hedge Fund Holders: 106

Alibaba Group Holding Limited (NYSE:BABA) offers technology infrastructure and marketing reach to aid merchants, brands, retailers, and other businesses. The company is based in Hangzhou, China.

A ‘Buy’ rating was kept on Alibaba Group Holding Limited (NYSE:BABA) shares on August 8 by analyst Leo Chiang at Deutsche Bank. Chiang also raised the price target on the stock from $155 to $160.

In the first quarter of its fiscal 2023, Alibaba Group Holding Limited (NYSE:BABA) delivered EPS of $1.70, beating estimates by $0.19. The company’s revenue was $30.5 billion, also beating estimates by $296 million.

Alibaba Group Holding Limited (NYSE:BABA) was held by 106 hedge funds in the second quarter, who owned $7.4 billion of the company’s shares.

Artisan Partners, an investment management firm, mentioned Alibaba Group Holding Limited (NYSE:BABA) in its second quarter 2022 investor letter. Here’s what the firm said:

Alibaba rose 4% during the quarter. We would love to say the share price performance was due to strong operational performance. Unfortunately, that was not the case. The most recent earnings results showed its core e-business still had not returned to growth, primarily due to the difficult retail environment caused by the government’s zero-COVID policy. Alibaba also appears to be losing market share due to its product mix tilted toward apparel and cosmetics, categories currently stalled in this environment. The share price performance this quarter was largely a function of exogenous items—specifically, government actions in the form of stimulus to support the economy and less regulations.

Despite the poor recent results, Alibaba remains a powerful economic engine. It is a global leader in e-commerce and cloud computing, both of which should grow nicely over time. Management has started taking actions to improve profitability, which has been burdened by significant investment in loss-making business ventures. The financial results should improve significantly when China’s economy starts to recover from COVID-19 outbreaks. The shares are incredibly cheap and have some of the highest upside potential in the portfolio. Even embedding significant losses from new ventures, we estimate they are trading at 11X-12X unlevered earnings. In our view, the shares could double, and they still would not be expensive.”

See also the 50 Most Beautiful Cities in the US and the 12 Best Infrastructure Stocks To Buy Now.

Page 5 of 5