Artisan Partners, an investment management firm, published its “Artisan Global Value Fund” second-quarter 2022 investor letter – a copy of which can be downloaded here. A return of -13.40% was recorded by its Investor Class: ARTGX, -13.32% by its Advisor Class: APDGX, and -13.33% by its Institutional Class: APHGX, in the second quarter of 2022, outperforming its MSCI All Country World benchmark that delivered a -15.66% return in the same period. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.
In its Q2 2022 investor letter, Artisan Global Value Fund mentioned Alibaba Group Holding Limited (NYSE:BABA) and explained its insights for the company. Founded in 1999, Alibaba Group Holding Limited (NYSE:BABA) is a Hangzhou, China-based e-commerce company with a $285.4 billion market capitalization. Alibaba Group Holding Limited (NYSE:BABA) delivered a -13.48% return since the beginning of the year, while its 12-month returns are down by -47.56%. The stock closed at $102.78 per share on July 27, 2022.
Here is what Artisan Global Value Fund has to say about Alibaba Group Holding Limited (NYSE:BABA) in its Q2 2022 investor letter:
“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.”
Our calculations show that Alibaba Group Holding Limited (NYSE:BABA) ranks 19th on our list of the 30 Most Popular Stocks Among Hedge Funds. Alibaba Group Holding Limited (NYSE:BABA) was in 100 hedge fund portfolios at the end of the second quarter of 2022, compared to 96 funds in the previous quarter. Alibaba Group Holding Limited (NYSE:BABA) delivered a 16.37% return in the past 3 months.
In July 2022, we also shared another hedge fund’s views on Alibaba Group Holding Limited (NYSE:BABA) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q2 page.
Disclosure: None. This article is originally published at Insider Monkey.
