Jim Cramer is Watching These 4 Stocks Ahead of Earnings and Key Analyst Events

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

Number of Hedge Fund Investors: 116

Cramer said he’s be watching Alibaba Group Holding Ltd – ADR (NYSE:BABA) earnings this week because China “needs to show it has an internal combustion engine rather than a whole economy built around exports.”

Cramer said that Alibaba Group Holding Ltd – ADR (NYSE:BABA) is his “favorite” Chinese company that “there is” in addition to Zeekr, which recently went public. Cramer thinks Alibaba Group Holding Ltd – ADR (NYSE:BABA) earnings would receive a lot of attention as analysts would make a case for buying Chinese stocks.

Artisan Select Equity Fund stated the following regarding Alibaba Group Holding Limited (NYSE:BABA) in its fourth quarter 2023 investor letter:

“Pretty much all of our holdings rose during the quarter. Only one stock declined by more than a couple of percent—Alibaba Group Holding Limited (NYSE:BABA), which was down 9% for the quarter and 12% for the year. This investment continues to be a disappointment. We estimate the shares are trading at around 5X EBITA—a valuation normally reserved for a company with evaporating profits. While it’s true Alibaba is underperforming its peers in the market, the fact is it remains the market leader in its core businesses, and the business is still growing. In the most recent quarter, revenues grew 9% and profits grew 26%.It’s not evaporating.

The management seems to be making meaningful changes designed to enhance shareholder value, including structural changes to improve profitability and restore its competitive position. It is monetizing non-core assets and making improvements in capital allocation. A lot of good things are happening that are not yet recognized in the share price. There are reasons—primarily geopolitical—for this, but at the current valuation, we could easily see the shares double and they would still be cheap.”

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