5 Best Buy-the-Dip Stocks To Buy Now

1. Alibaba Group Holding Limited (NYSE:BABA)

Number of Hedge Fund Holders: 105

Alibaba Group Holding Limited (NYSE:BABA) is an Hangzhou, China-based diversified technology company founded in 1999 that specializes in e-commerce and cloud computing.

The overhang of a possible delisting from the US stock markets is eroding as the US accounting authority commented that it had been provided with complete access to inspect and investigate Chinese firms for the first time. Furthermore, the ease of the zero-COVID policy in China is expected to play in favor of the e-commerce giant. In a research note issued on November 18, Fawne Jiang at Benchmark assigned Alibaba Group Holding Limited (NYSE:BABA) stock a target price of $180 along with a Buy rating. The analyst noted the weakness in Q2 FY23 results and soft guidance for Q3 FY23 due to challenging macroeconomic circumstances is expected to adversely impact growth. However, experts believe that FY24 should be positive for Alibaba Group Holding Limited (NYSE:BABA) with a return towards the growth of customer management revenue (CMR).

Here’s what Longleaf Partners said about Alibaba Group Holding Limited (NYSE:BABA) in its Q3 2022 investor letter:

“Alibaba Group Holding Limited (NYSE:BABA), the largest e-commerce and cloud services provider in China, was the top detractor for the quarter in the face of China and Hong Kong macro concerns. The biggest value driver for Alibaba is domestic consumption, which has been softening in recent months in the face of property sector weaknesses, continuing pressure from the government’s zero-COVID policy and a significant spike in youth unemployment rates (reaching almost 20% in the quarter). We have begun to see some progress, with policies announced to make more financing available to developers to finish uncompleted units. Additionally, COVID containment measures are beginning to ease with Hong Kong recently announcing an end to all quarantine requirements for international arrivals. While we recognize that top-line growth may be constrained in the near term, we believe Alibaba is still well positioned to grow its bottom line at a double-digit rate in coming quarters by reducing costs and reducing spend on strategic initiatives. Our management partners are going on offense through smart capital allocation and increased the buyback authorization in the quarter to $25 billion dollars.”

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