Alibaba Group Holding

BABA-N

This is pretty much the market in China. It has been consolidating for awhile, probably because of trade concerns. He does not see any breakdown, this is a consolidation. Can probably pick up safely at the low points of the trading range.

Penalized for missing on earnings. Great growth story, but it doesn’t have the cloud services that Amazon has. A little bit cautious. Wait for it to settle down before looking at it.

They are dominant. Are generating cash hand over fist and are continuing to grow. Earnings are out this week. Longer term with the cash generating capability is staggering. Might see the growth slow a bit. Yield = 0% (Analysts’ price target is $240.50)

Chinese version of Amazon. Growth with the Chinese consumer has been the positive tailwind story. Problem now is the high multiple, plus trade spat with US has taken wind out of the sails of Chinese economy.

He doesn’t think that Alibaba has dropped very much compared to its volatility. He sees this stock as defensible: he likes the market, the industry and the name. He sees the technical action of the stock as a consolidation pattern. The company is growing rapidly. It’s PE ratio is high but its PEG ratio (price/earnings relative to growth) is not far from 1, which is a reasonable level. Compared to other momentum stocks, like Netflix, a stock with a PEG of 1 is priced much less aggressively. (Analysts’ price target is $241.14)

This is China’s answer to Amazon. They are more integrated, including delivery and infrastructure. It offers access to the world’s second largest economy. Marketcap of $500 billion.

Great company with incredible growth. The stock has consolidated for nearly the past year. Wait for seasonality starting in early October.

One of his biggest positions and a past pick. It's in the tech sector that grows at least 30% a year. They're not in the U.S. that much, but big across southeast Asia and even in Russia. This has lots of legs and opportunity.

A core holding. In 5-7 years he wants to double his holding. He believes in it that much. It's in an amazing position in China, a tech giant over there. North American investors have slightly dismissed Alibaba which is unfair.

U.S. companies like Nike and Starbucks are flocking to Alibaba to partner with them. They are the Google of China. Massive and powerful. Either buy this stock or an emerging market ETF for exposure.

Google vs. Alibaba: He owns both. Both have leadership in the West and China, respectively. Under 25% of Google's revenue stream comes from the search engine, then they re-invest it. The search engine is like a piggybank and takes up a huge proportion of overall online advertising revenue. Similarly, Alibaba is dominant in China. They have long runways (as noted in how Google reinvests revenue from searches). As for Trump's tariffs, these are nickels and dimes against the big scheme of themes--unless the tariff war escalates.

He likes this long-term. It's like Amazon, mostly in e-commerce and the Cloud. Current negative sentiments about Chinese companies are only temporary. Compared to Tencent Holdings, Alibab is pretty close in terms of valuation and growth rates. He likes and owns both names. Alibaba has a huge runway, given the huge population of China.

You own it for the long term. It is the technology component of an emerging market.

90% of its revenue comes from China, a monopoly, which is a big plus. This company is growing rapidly and they want to expand internationally which is harder. They also want to grow their Cloud business. Thei Alipay is a popular payment system used across China. This could add value to Alibaba. There's good growth potential here. But it's not a cheap stock and expect volatility.

Can it be the next Amazon and a big gainer? It's a great company and can do very well, but every time he's invested in China, his money's been stolen. He's super-cautious about China. He'd prefer American companies where he knows and trusts the law.