Alibaba Group Holding (BABA)

(A Top Pick May 31/17. Up 40.1%.) The Amazon (AMZN-Q) of China, except they are servicing a population of 1.4 billion. They are also servicing a population, where outside the primary cities, there is very little retail infrastructure, which is why they are doing so well. Also, they are taking the cash flow from their domestic core business and are making very smart acquisitions outside.

Amazon (AMZN-Q) or Ali Baba (BABA-N)? He would add to both of these now, for 3 reasons. #1 the pullback. #2 it is a longer-term great story and #3 you have an $.80 Cdn$, which you don’t see very often.

AMZN-Q vs. BABA-Q. He likes them both. It is always better to buy them in a correction. But they both look like they could go higher. He suggests making a partial buy now. BABA-N looks exceptionally good because it is centric on Asia. BABA-N also gives you a Paypal equivalent. AMZN-Q is mostly North America.

He has been watching it very closely and would like to take a position, but it has run up quite a bit. It is a lot cheaper than AMZN-Q. It has a 31 times earnings and 26% growth rate over time. It has run up quite a bit, but pick your point where to invest. It has outperformed AMZN-Q quite a bit.

He is very reluctant to invest in Chinese companies because he does not know how transparent their accounting is among other unknowns. They are doing a terrific job, however. They appear to be making lots of money.

Population density lends itself very closely to local delivery, and this company does a very good job of that. It has a very big captive audience and a very good business model. He likes the concept and feels the business model is sustainable. However, he struggles with the valuation. It is very rich. There are concerns with the governments aspects, and disclosure is not as great as it could be. Until he sees some kind of correction in the stock, it is one he would not buy.

You have a mid-30% grower here, which is phenomenal. This is going into earnings, and he gets really skittish when a graph is going from bottom left to top right in a chart, because a lot can happen. With something like this, if you had a really big whopping gain, consider paring it back.

This has put out some really outstanding numbers lately. Core earnings have grown by 46% year-over-year, and where else are you going to get growth like that. Right now it is a Chinese story and a Chinese play, but they are doing outreach to North American retailers in order to sell their wares in to China. (Analysts’ price target is $170.)

A unique company. People think of this as the Amazon of China, but it really isn’t. They act as a platform for 3^rd party people. They have no credit issues. A very domestic play, so you have to continue to believe China will do well, which he does. It is trying to be a more global player, so you have to wait and see. Also, has a company called Alipay, which is something they can monetize over the next little while.

An online, mobile, e-commerce site. They don’t actually own inventory or sell anything. They provide a 3^rd party online service to people who want to sell. They have some really good businesses including Alipay which is growing rapidly, and a Cloud business. 80% of revenue comes from China with about 400 million buyers and about 5 million sellers. A very big company in China. The stock has done well because of the expectation that they are going to be moving internationally. There are a lot of positive things. The one problem is that it is competing outside of China, and it is much harder for them to compete against the Amazons of the world. Look at this on a big pull back.

He likes this company. They just came out with a presentation to financial analysts, and the numbers caught everybody by surprise. They were staggered by the accelerating growth rate the company was talking about. They have a tremendous in with China, and the options are quite illiquid because they are pretty volatile, so you get a nice premium for it.

This has been a fantastic investment. On-line adoption in shopping and payment systems in China has a far higher adoption than it has in North America and Europe. In that respect, this company is very, very well positioned. If you want exposure to the Asian market, this is probably one of the best places to be. However, he doesn’t know if you are actually owning anything as a shareholder, and accounting issues are always difficult. He would rather you own companies with American domiciled positions.

This is no exception to the FANG move. You did not get a lot of corrective action. It is overdue. It is healthy looking, but long overdue for a correction. The last resistance point is the last possible pullback ($112 level). It is a little overbought.

Had fabulous news this week in that projections going forward are over 40% revenue growth. It is way more than the Amazon of China. The Chinese are going to leapfrog over credit cards, and will be going right to paying with their phones. This company is perfectly positioned for this. This is not just China, they are all through Asia.

(A Top Pick Feb 2/17. Up 21%.) E-commerce in China makes sense, because there is such a big population. She still thinks there is a lot of upside.