The shares of this Chinese e-commerce company were just initiated at Bernstein with an “outperform” rating and were upgraded by Goldman to “buy”. The company beat estimates by eight cents last quarter.
Alibaba (BABA)
from Cabot China & Emerging Markets Report
Alibaba (BABA) is my pick, partly because of the company’s position in China, and partly because of its potential for expansion outside China. Alibaba’s e-commerce sites—Taobao Marketplace, Tmall and Juhusuan are the main ones—connect buyers with sellers, consumers with other consumers and companies with companies.
The company owns an 80% share of China’s online shopping market, which will only grow bigger as smartphones give more consumers online access. Alibaba’s enormous IPO in September raised over $25 billion, the biggest ever. And with the money raised, Alibaba has a mammoth fund for acquisitions and development that founder Jack Ma (an English teacher who founded the business as a way for customers outside China to connect with Chinese suppliers) and new CEO, Jonathan Lu, can use to expand operations in China or to bring Alibaba-style commerce to the rest of the world.
BABA went into a severe post-IPO correction in November 2014, falling from a high of 120 to just under 80 in May 2015. But the stock has now put in a solid bottom with support between 80 and 82, giving it a technical base on which to build future advances. Alibaba remains one of the biggest Chinese stories around, and I think it will run well when the breakout comes.
Paul Goodwin, Cabot China & Emerging Markets Report, www.cabot.net, July 1, 2015