5 Stocks to Buy at a Discount Now

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1. Alibaba Group Holding Ltd – ADR (NYSE:BABA)

Number of Hedge Fund Investors: 110

Alibaba Group Holding Ltd – ADR (NYSE:BABA) has been struggling amid an unfriendly business environment in China and the rise of competitors in the country. But many analysts believe the stock will rebound thanks to its long-term growth catalysts and size of ecommerce operations. In December, Baird analyst Colin Sebastian said Alibaba Group Holding Ltd – ADR (NYSE:BABA) could be one of the stocks to benefit in 2024 due to AI and increased operating efficiencies. The analyst, however, decreased his price target on the stock to $95.

The analyst said some catalysts for Alibaba Group Holding Ltd – ADR (NYSE:BABA) are “ecommerce competition, corporate reorganization, shareholder returns, [generative AI] initiatives, and Alicloud trends.”

L1 Long Short Fund made the following comment about Alibaba Group Holding Limited (NYSE:BABA) in its second quarter 2023 investor letter:

Alibaba Group Holding Limited (NYSE:BABA) (Long -18%) shares weakened in recent months as Chinese reopening strength faded and macro-economic datapoints began sequentially declining. Nevertheless, we believe the Chinese government will use consumption as a key lever to reinvigorate the economy post-COVID lockdowns. Alibaba remains a high-quality business with leading positions in both eCommerce and Public Cloud, and management is taking proactive steps to unlock shareholder value. It has announced plans to split into six major business groups – Cloud Intelligence, Taobao Tmall, Local Services, Global Digital, Cainiao Smart Logistics and Digital Media, and Entertainment Group. Each group will be managed independently, with a separate CEO and board, have the flexibility to raise external capital and potentially pursue separate IPOs. We believe this restructure will be a strong positive catalyst to unlock the sum-of-the-parts valuation upside in the company.”

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