2024-03-29 09:00:00 ET
Summary
- Investing in Alibaba has been challenging, but there may still be an opportunity for investors with a high tolerance for risk.
- Despite external negative factors, Alibaba's financials and balance sheet remain strong, with significant liquidity and profitability.
- The company's capital allocation plan, including dividends and share buybacks, adds credibility and potential attractiveness to the investment.
Investing in Alibaba (BABA) has been an absolute trainwreck for many investors, including myself. The narrative about Chinese companies has been winning rather than the fundamentals. Maybe that's the problem, as I continue to overlook the external negative factors while continuing to concentrate on the numbers. When BABA reported its Q3 numbers at the beginning of February, they produced a top and bottom line beat while increasing its buyback authorization by an additional $25 billion. No matter what BABA does, the market doesn't respond well, and BABA continues to resemble a value trap rather than a value play. I have made several purchases under the $100 level and continue to dollar cost average into my position, but I am still in the red. This is all about the numbers, and if you believe the numbers then BABA could be a coiled spring waiting to burst. I have been wrong the whole way down, but I still believe there is an immense opportunity for investors who have a high tolerance for risk and are willing to speculate. While shares of BABA look like they want to bottom, they could very well continue to decline....
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Alibaba: Something's Got To Give And It's Been The Share Price