Alibaba Group Holding (BABA)

The numbers are coming in the way he had hoped. He is buying this as a five-year project. They are strategic in what is going to happen in China, and he thinks China is going to be good, not bad. As you convert into a consumer driven economy, as the Chinese are doing, this company is strategically placed for when the Chinese consumer does well. They are very big and mobile.

Charts look a bit negative. Price is below all the moving averages, the 50, 100 and the 200 day, and are trending lower. The reason is most likely because it is in China. Trading at 27X forward earnings with a 23% long-term growth rate, but that growth rate could be volatile given what is happening there.

To him, this suffers from one fatal flaw, in that it is located in China, and the visibility he has there is extremely limited, so he would pass. He would prefer Amazon (AMZN-Q).

An online commerce retail company. She would not be buying this because it is trading at a huge multiple. Even though it has pulled back from its IPO, it is not cheap. A lot of the price is predicated upon momentum and expectation, and it can’t be justified by traditional valuations.

This is a platform that the Chinese are using. The Chinese are behind us. They haven’t built as many shopping centres and have a population that is used to using online more than going to the mall. This will provide a multitude of services and the platform looks good. This could be a long term play for decades.

This is an expensive stock. It came out of the gates with so much hype that it has been difficult for investors, with such a steep valuation and such high expectations.

It would be nice to have a longer time frame, but it has a base of around $81. The top of the trend of $86-$87 is probably going to be its support. If it breaks down through that, we know it is going to $81. Pretty good risk/reward.

Some of the recent concerns are that they are getting sued by places like Gucci, etc., for presumably knowing that some of the goods are being sold that are counterfeit. Valuations are actually not too bad, and their growth characteristics are quite incredible going forward, but treat this was some caution.

She doesn’t own this because it is a valuation issue for her. Ownership is still quite largely held by the founders. It trades at a very huge multiple. For stock that trades at 40 or 50 times earnings, if it stumbles and drops 10%-30%, it is still very difficult for her. There are a lot of expectations built into a name like this.

China is going to become the largest consuming country and these guys are the box on the supplier as far as purchasers are concerned. He thinks this one could really surprise you on the upside. The price has stabilized here.

The IPO hit $120 at one point. He would definitely be looking at buying this name right now. It is in a perfect position. A big competitor to some of the big names in the US. One of the names he has enjoyed with some good success, is the PowerShares Golden Dragon China ETF (PGJ-N). He doesn’t see this stock in that, but it would certainly fit in nicely.

Has stayed away from US non-domiciled companies. He has uneasiness with the financial reporting. There have also been rumours of counterfeiting, etc. There are other places where you can be more confident.

Eventually the price comes down to the fair market value. It is a matter of timing. This stock is disconnected from its fair market value.

It is trading perfectly to his EBV lines. It is coming down to EBV +7. His model price is $59.53, or 30% lower. At the end of the day it will spend some time at $75, get comfortable, and then we will see what happens. They will resolve some accounting problems. It is starting to have some value here.

This was never a Buy. He is conservative, and the stock has to pay a dividend or he doesn’t buy it. It really comes down to how the stock is priced. He would wait until there is further evidence as to where their earnings are going to be. There are easier companies to understand than this one.