Patient Capital Management, a value investing firm, released its “Patient Capital Opportunity Equity Strategy” first quarter 2025 investor letter. A copy of the letter can be downloaded here. 2025 got out to a solid start with the market hitting all-time highs in mid-February. However, a dramatic reversal pushed the S&P 500 down 8.7%, closing the quarter down 4.3%. During the quarter, the strategy returned -9.5% net of fees compared to the S&P 500’s -4.3% return. According to a three-factor performance attribution model, allocation and interaction effects contributed positively to the portfolio’s performance, which were partially offset by selection effects. In addition, you can check the fund’s top 5 holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, Patient Capital Opportunity Equity Strategy highlighted stocks such as Alibaba Group Holding Limited (NYSE:BABA). Alibaba Group Holding Limited (NYSE:BABA) provides technology infrastructure and marketing reach. The one-month return of Alibaba Group Holding Limited (NYSE:BABA) was -12.28%, and its shares gained 58.39% of their value over the last 52 weeks. On April 23, 2025, Alibaba Group Holding Limited (NYSE:BABA) stock closed at $118.97 per share with a market capitalization of $285.474 billion.
Patient Capital Opportunity Equity Strategy stated the following regarding Alibaba Group Holding Limited (NYSE:BABA) in its Q1 2025 investor letter:
“Alibaba Group Holding Limited (NYSE:BABA) rebounded strongly in the first quarter following DeepSeek’s surprise AI product launch in early January that caught markets off guard. The development boosted expectations of improving competitiveness in a market largely considered “un-investable”. We’ve long appreciated Alibaba as it continued trading at a significant discount to its sum-of-the-parts valuation. With most investors writing off Chinese companies while our assessment of the odds of Chinese stimulus grew, we saw an opportunity to invest in a high-quality business at rock bottom prices. During this period, the company initiated both a dividend (1.0% Yield) and buyback program, repurchasing 7% of shares outstanding over the last twelve months. Unfortunately, much of the gains achieved in the first quarter have been reversed following escalating tariff tensions between the US and China. While the ultimate impact of tariffs remains uncertain, Alibaba has limited exposure to international markets with only 12% of revenue currently coming from outside of China. Though a tariff war broadly hurts economic activity and can create negative feedback loops into domestic demand, we believe Alibaba stands as one of the more insulated Chinese companies in this environment.”
An e-commerce platform displaying a wide range of products to customers online.
Alibaba Group Holding Limited (NYSE:BABA) is in 17th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 107 hedge fund portfolios held Alibaba Group Holding Limited (NYSE:BABA) at the end of the fourth quarter compared to 115 in the third quarter. Alibaba Group Holding Limited’s (NYSE:BABA) consolidated revenue for fiscal third quarter of 2025 was RMB 280.2 billion, an 8% rise from previous year’s same quarter. While we acknowledge the potential of Alibaba Group Holding Limited (NYSE:BABA) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we covered Alibaba Group Holding Limited (NYSE:BABA) and shared the list of stocks that could 10X over the next 2 years. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.