Longleaf Partners Fund, a Memphis-based fund under Southeastern Asset Management, published its “Longleaf Partners International Fund” fourth quarter 2021 investor letter – a copy of which can be downloaded here. Longleaf Partners International Fund added 1.51% in the fourth quarter versus MSCI EAFE’s return of 2.69%. For the full year, the Fund fell 0.89%, while the MSCI EAFE returned 11.26%. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Longleaf Partners International Fund, in its Q4 2021 investor letter, mentioned Alibaba Group Holding Limited (NYSE: BABA) and discussed its stance on the firm. Alibaba Group Holding Limited is a Hangzhou, China-based e-commerce company with a $289.9 billion market capitalization. BABA delivered a -11.45% return since the beginning of the year, while its 12-month returns are down by -56.48%. The stock closed at $105.19 per share on February 28, 2022.
Here is what Longleaf Partners International Fund has to say about Alibaba Group Holding Limited in its Q4 2021 investor letter:
“Alibaba (-50%, -2.26%; -22%, -0.82%), the largest online retail platform in China, was another top detractor for the year and in the fourth quarter. Alibaba reported weak quarterly results and downgraded its sales outlook for the current fiscal year to 20- 23% growth, down from original guidance of 29-32% growth. Macro headwinds, weak consumer sentiment, regulatory scrutiny and competitive forces are having a larger than expected impact on overall retail sales and Alibaba’s market share. Notably, overall retail sales in China slowed down to a meager 5% growth in the September
quarter. Slowing consumption, combined with stiff competition from new entrants in livestreaming ecommerce, have resulted in transitory deceleration in Alibaba’s core ecommerce growth trajectory. Additionally, the company is accelerating strategic investments in new initiatives, including Community Group Buying (Taocaicai), Taobao Deals, Local Consumer Services and International Ecommerce. These are future growth drivers but are depressing company’s earnings today. In December, we exited our full position in Alibaba. This was more of a tactical move than a change in investment conviction. We initiated the position early in 2021, and the continued challenges in the second half of the year resulted in a loss that was material enough to be helpful from a tax distribution management point of view. We are sensitive to taxable gains and try to minimize where sensible, so we took advantage of the opportunity to reduce that liability and plan on revisiting the Alibaba opportunity in 2022. We continue to own Alibaba in our Asia Pacific strategy.”
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Our calculations show that Alibaba Group Holding Limited (NYSE: BABA) ranks 20th on our list of the 30 Most Popular Stocks Among Hedge Funds. BABA was in 96 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 115 funds in the previous quarter. Alibaba Group Holding Limited (NYSE: BABA) delivered a -20.07% return in the past 3 months.
In February 2022, we also shared another hedge fund’s views on BABA in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.
Disclosure: None. This article is originally published at Insider Monkey.
