Should You Consider Taking Profits From Your Alibaba (BABA) Shares?

Polen Capital, an investment management firm, published its “Polen Global Growth” fourth quarter 2021 investor letter – a copy of which can be downloaded here. A quarterly gross return of 7.08% was delivered by the fund for the fourth quarter of 2021, versus the MSCI All-Country World Index (the “Index”)’s return of 6.67% for the same period.  Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Polen Global Growth, 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 $340.3 billion market capitalization. BABA delivered a 5.70% return since the beginning of the year, while its 12-month returns are down by -53.64%. The stock closed at $125.56 per share on February 16, 2022.

Here is what Polen Global Growth has to say about Alibaba Group Holding Limited in its Q4 2021 investor letter: 

“The Portfolio was full of secular growth companies coming into the pandemic, and we’ve added several during the past couple of years. We aim to lean in when we find dominant businesses that meet our investment guardrails and have the wind at their back. We’ve been equally vigilant, though, of managing risk and managing valuations. If you look at the aggregate activity in the Portfolio during 2021, you could broadly characterize most of our actions into one of those two buckets.

In terms of managing risk in 2021, the sale of our positions in Alibaba and Tencent are probably the best examples. We owned both companies since the inception of the Global Growth strategy at the beginning of 2015, having an overweight in China as a result. Despite the recent share price declines, prior to our sale in July 2021, we earned a compound rate of return of almost 10% on Alibaba from initial purchase to our final sale more than 6 ½ years later.”

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Our calculations show that Alibaba Group Holding Limited (NYSE: BABA) ranks 13th on our list of the 30 Most Popular Stocks Among Hedge Funds. BABA was in 115 hedge fund portfolios at the end of the third quarter of 2021, compared to 146 funds in the previous quarter. Alibaba Group Holding Limited (NYSE: BABA) delivered a -22.29% return in the past 3 months.

In January 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.