Nasdaq BABA Alibaba

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

MercadoLibre (NASDAQ: MELI) was one of the hottest stocks during the worst of the pandemic, hitting an all-time high of $1,984 on Jan. 20, 2021. Yet, shares of the Latin American online marketplace now trade around $739, down 63% from those highs. Can MercadoLibre rebound amid su

Alibaba (BABA) closed the most recent trading day at $116.76, moving -1.66% from the previous trading session. This change was narrower than the S&P 500's 2.01% loss on the day. Elsewhere, the Dow lost 1.56%, while the tech-heavy Nasdaq lost 0.2%.

JD.com's (NASDAQ: JD) investors have had a roller-coaster ride of late. In the last 12 months, the stock traded as high as $93 and as low as $42 -- and currently stand at about $65.

Year-to-date, the major indexes are down anywhere from 12% to 26%, with the growth-heavy Nasdaq Composite getting hit the hardest. That said, some investors would love to have portfolios down only this much in 2022 -- many top growth stocks have seen their share prices drop 50% o

Travel and leisure shares positioned U.S. stock indexes for a higher open on Tuesday after China relaxed some COVID-19 quarantine requirements for international travelers, raising hopes of a revival in global growth.

The NASDAQ 100 Pre-Market Indicator is up 27.18 to 12,035.42. The total Pre-Market volume is currently 42,311,281 shares traded.The following are the most active stocks for the pre-market session: Kezar Life Sciences, Inc. (KZR) is +5.28 at $11.06, with 4,232,849 shares traded.

Travel and leisure shares propped up U.S. stock index futures after China relaxed some COVID-19 quarantine requirements for international travelers, raising hopes of a revival in global growth.

Amazon.com (NASDAQ: AMZN) announced its annual Prime Day event will be held on July 12 and 13, the seventh consecutive year the e-commerce giant has run the sales extravaganza.

The last fiscal year was difficult for Chinese tech conglomerate Alibaba (NYSE: BABA). Scrutiny from both Chinese and the U.S. regulators (albeit for different reasons), competition from younger companies like Pinduoduo and Douyin, and weaker financial performance were just a few

The NASDAQ 100 Pre-Market Indicator is up 94.83 to 11,792.51. The total Pre-Market volume is currently 37,654,586 shares traded.The following are the most active stocks for the pre-market session: ProShares UltraPro QQQ (TQQQ) is +0.63 at $25.96, with 4,038,274 shares traded. Th

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

Alibaba (BABA) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.

The NASDAQ 100 Pre-Market Indicator is up 53.55 to 11,581.26. The total Pre-Market volume is currently 52,327,317 shares traded.The following are the most active stocks for the pre-market session: Boxed, Inc. (BOXD) is +0.41 at $2.59, with 7,376,105 shares traded. As reported by

Jenny Bai was among 10 high-performing computer science students from different Chinese universities selected by a Beijing-based internet firm for a job upon graduation, following four rounds of arduous interviews.

The macro weakness in China, increased competitive activity, and COVID-led disruptions have weighed on the financial performance of internet giant Alibaba (NYSE: BABA). The company's growth decelerated sequentially over the past several quarters. 

Given the challenges, Alibaba stock has dropped nearly 54% from its 52-week high. While the slowdown in growth dragged its share price lower, regulatory headwinds further contributed to its decline. 

What’s Next?

Though BABA stock has decreased substantially, COVID-led uncertainty and the economic slowdown could restrict the recovery in the short term. However, favorable government policies and easing COVID restrictions could reaccelerate growth. 

During last quarter’s conference call, Alibaba’s CEO, Daniel Zhang, indicated supportive government policies. Zhang stated, “Chinese government has released important policy signals on its commitment to stabilize the economy.” Moreover, “They have also issued clear statements on promoting the development of internet platform economy through a healthy, regulatory environment.”

As the operating environment shows signs of improvement, US Tiger Securities analyst Bo Pei upgraded BABA stock to Buy from Hold. 

Pei added, “Despite the more challenging June quarter, we are upgrading BABA to BUY as we believe both revenue and profitability will bottom out and hit a long-awaited inflection point in the quarter.” 

The analyst expects Alibaba’s growth to improve in the second half of this year, benefitting from easier year-over-year comparisons and government stimulus. 

Echoing similar sentiments, Bank of America Securities analyst Eddie Leung reiterated his Buy recommendation on BABA stock. 

Offering updates from its virtual Innovative Conference with Alibaba, Leung said supply bottlenecks are easing. Further, Alibaba is witnessing an improvement in demand in some product categories. However, for the cloud business, “Alibaba sees resumption of some projects delayed by the lockdowns but expects an economic slowdown and moderate traffic growth among Internet sector clients to weigh on the near-term growth.”

Including Pei and Leung, Alibaba has received 16 Buy recommendations. Meanwhile, two analysts remain sidelined. 

Overall, it sports a Strong Buy consensus rating on TipRanks. Further, the average Alibaba price target of $161.01 implies 51.2% upside potential.

Bottom Line 

The easing of regulatory headwinds and COVID-led restrictions will likely support Alibaba’s growth. Moreover, easier year-over-year comparisons are positive. However, uncertainty related to the pandemic, an expected softness in the cloud business, and a tough macro environment pose challenges. 

Disclosure

With the U.S. stock market as tight as it is, it's probably best to look elsewhere. Tactical allocations are always a good option whenever there isn't much to choose from.

Chinese stocks can be a great option at the moment, as they're largely oversold and operate in one of the few economies with subdued inflation. Moreover, Chinese stocks provide diversification benefits to U.S.-centric stock portfolios.

I utilized TipRanks' stock screener to find three Chinese stocks that I'm bullish on and decided to expand upon their key metrics in this article.

Bilibili (BILI)

Bilibili is a significantly oversold asset at the moment. The stock has drawn down by more than 40% since the turn of the year, as Chinese stocks have faced significant geopolitical headwinds.

Nonetheless, there's hope for Bilibili, as it's a unique stock. Firstly, the company's effort to appeal to a new consumer base has been successful. 86% of Bilibili's user base is Gen-Z and younger millennials. Thus, the firm's consumer longevity is of no doubt.

Also, the stock is relatively undervalued, with a price-to-sales discount of 65.7% compared to its five-year average and a price-to-book ratio at a discount of 65.9%.

Turning to Wall Street, Bilibili earns a Moderate Buy consensus rating based on three Buys and six Hold ratings assigned in the past three months. The average BILI stock price target of $32.39 implies a 23.3% upside potential.

Alibaba (BABA)

Alibaba stock is a sleeping giant; there's no doubting the fact. However, Beijing's self-induced systemic risk has caused the stock to underperform. Additionally, it's a leading Chinese asset, meaning that Alibaba's been under excess beta sensitivity during the recent Chinese bear market. 

However, the tides seem to have changed. Alibaba stock has found a new investor base as market participants seek an alternative habitat amid a U.S. bear market. For instance, while the S&P 500 (SPX) has dipped by more than 6% during the past month, Alibaba has surged by an excess of 16%.

From a non-statistical viewpoint, Alibaba has a commercial profile that would leave many in awe. The company's model takes advantage of goods arbitrage between the developed nations and global midstream suppliers, which is yet to be challenged.

Furthermore, Alibaba's local presence is phenomenal, as its array of acquisitions has allowed it to build a vertical and horizontal business model that focuses on speed and efficiency.

Also, the stock is relatively undervalued. Firstly, Alibaba's price-to-earnings ratio is at a 62.3% discount compared to its five-year average, meaning that the market is yet to price its EPS achievements. Moreover, Alibaba is relatively undervalued on a cash basis, as its price-to-cash-flow ratio is currently 36.6% less than its five-year average.

Turning to Wall Street, Alibaba earns a Strong Buy consensus rating based on 17 Buys and two Hold ratings assigned in the past three months. The average BABA stock price target of $159.84 implies a 56% upside potential.

JD.com (JD)

At an inflation rate of little over 2%, China is one of the few nations that isn't faced with high price levels at the moment. In addition, the nation's capacity utilization is showing signs of improvement due to lighter COVID-19 policies.

According to Bank of America (BAC): "The capacity in Shanghai and its nearby region saw its low in April, rebounded to about 80% in the 1st week of May, came down again in the 3rd week of May, and then went back up to over 80% recently."

Online retail stores such as JD.com could benefit as the Chinese economy enters a cyclical recovery. The company exhibits a market stronghold with a nearly 15% market share. Moreover, JD.com is running an efficient company with an asset turnover ratio of 2.13% and cash from operations of $7.31 billion.

Furthermore, relative valuation metrics indicate that JD stock is undervalued. For example, JD is trading at a discount to its five-year price/sales ratio worth 26% and a normalized price-to-cash-flow ratio discount of 25.6%.

Turning to Wall Street, JD earns a Strong Buy consensus rating based on 10 Buys and two Hold ratings assigned in the past three months. The average JD stock price target of $82.75 implies a 26.7% upside potential.

Concluding Thoughts

Chinese stocks are a tactical play at the moment, as many investors are exiting the U.S. market and seeking new pastures. Additionally, with economic circumstances improving in China, many of the areas listed securities could start performing once more.

Disclosure

Are These The Best E-Commerce Stocks To Invest In Right Now?For investors searching for the best stocks to buy today, e-commerce stocks could be worth considering. Sure, consumer prices may be gaining at faster-than-expected paces now. However, there remains some credibility to t

Alibaba (BABA) closed the most recent trading day at $102.46, moving +1% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.22%. At the same time, the Dow lost 0.13%, and the tech-heavy Nasdaq gained 0.2%.

Chinese e-retailers like Alibaba (BABA) have had a rough time of things lately, mostly due to interference by the Chinese government. The threat of delisting from U.S. stock exchanges didn't help matters either.

However, Alibaba shot up 9.2% in the premarket on Friday due to one big new win handed down from that same Chinese government. Those gains did not manage to hold going into the trading session, as the stock is currently up only 1%.

Are the threats Chinese e-commerce operations facing coming to an end, and is it time for investors to consider buying in? I, meanwhile, am willing to acknowledge the possibility that this is the start of something great in Chinese stocks.

I'm therefore shifting my position from bearish to neutral. It's too early to start celebrating and buying yet because even as one problem is fading from view, a whole new problem is about to start up.

Alibaba has not had a great year so far. Alibaba spent the latter half of June 2021 into July above the $200 per share level. After a series of drops and a few recoveries, the company is now valued at less than half of what it was back at its highs of 12 months ago.

Meanwhile, the news that managed to shift my position around was a surprisingly big win. The Chinese central bank approved an application from Alibaba's parent company, Ant Group, to form a financial holding company. Such a move would allow Ant Group to seek an initial public offering after the company is established.

Wall Street's Take

Turning to Wall Street, Alibaba has a Strong Buy consensus rating. That's based on 17 Buys and two Holds assigned in the past three months. The average Alibaba price target of $159.84 implies 55.7% upside potential.

Analyst price targets range from a low of $115 per share to a high of $276 per share.

Investor Sentiment Shows That Some are Willing to Take Risks

Analysts are clearly heavily in on Alibaba. The TipRanks Smart Score seems to assent. Right now, Alibaba has a Smart Score of 9 out of 10, the second-highest level of "outperform." Most investor sentiment metrics aren't so clearly approving. However, they aren't exactly unhappy either.

Hedge fund involvement, as measured by the TipRanks 13-F Tracker, is one clear sign. Hedge funds increased their involvement with Alibaba by adding 1.1 million shares in the last quarter. That's not a huge gain percentage-wise—hedge funds have owned between 83 and 86 million shares since June 2021—but it is objectively substantial.

Meanwhile, insider trading at Alibaba is something of a blank slate. No data is currently available for insider trading at Alibaba, so no conclusions can be gathered about what those trades might mean.

Retail investors—at least those who hold portfolios on TipRanks—are a different story. TipRanks portfolios holding Alibaba shares slipped 0.1% in the last seven days but are up 0.7% over the last 30 days. Meanwhile, Alibaba's dividend history, or lack thereof, demonstrates a better focus on growth.

Trading One Problem for Another?

Granted, this isn't the first time that we've heard about Ant Group potentially getting a shot at an IPO. The earlier reports from Bloomberg were quickly addressed by the China Securities Regulatory Commission, which made it clear that no such review and research work was going on.

So for right now, it may be a good idea to give this news a couple of days to settle in and potentially be refuted later. If no such rebuttal emerges, then that could be good news for Alibaba and for other U.S.-listed Chinese stocks as a whole.

One of the biggest problems facing those stocks was potential crackdowns from the Chinese government. Chinese tech stocks had been battered extensively by such policy matters earlier this year. If the Chinese government starts to relent, then the threat of further crackdown may be off the table. That's certainly good news for all Chinese stocks trading on U.S. exchanges.

However, this comes at a comparatively bad time. All those Chinese e-commerce operations are now about to face much more hazardous economic conditions.

The likely upcoming recession is going to limit not only customers' interest in their products but also investors' ability to get in on the action. Granted, the fallout will hit retailers worldwide, but China will not be exempt, with consumers increasingly hesitant about making purchases and signs emerging that there's about to be a glut of goods available in stores as port congestion alleviates.

Indeed, U.S. seaports are already looking for an earlier peak season. Retailers are seeing explosive surpluses in available merchandise—around $45 billion in surplus by some reports—and that's going to drive prices down.

Throw in a gun-shy consumer who's filling up a gas tank at $5 or more per gallon and spending more than ever at the grocery store. That adds up to businesses selling huge volumes of surplus goods at pennies on the dollar.

Some might instead call this the "worst-case scenario for retail, or close to it." That's not good news for any online retailer, no matter what country they're operating within.

Concluding Views

If the reports about Ant Group and its potential IPO hold true, this is good news for Alibaba. Don't let anyone dissuade you from that. However, behind this pristine sliver of good news is a morass of bad news likely to swallow it whole.

Will it help insulate Alibaba from some of the worst of the bad news? Quite possibly. After all, Ant Group drawing investors will likely mean some benefit for Alibaba as well. It's better news if the Chinese government manages to continue being not hostile to Alibaba and others like it.

However, there are so many gray areas and potential disasters around Alibaba that recommending it would likely be a mistake. It does bear watching, however. Alibaba is currently trading below its lowest price targets and just off its lows for 2022. That may make it a good Buy for down the road.

Those who Buy now may see their investment reduced in value in the near term. Yet, there's no doubt that buying in at these comparatively-low prices may poise investors for explosive gains later, especially after consumers get their confidence back.

The odds of losing ground here are strong, but there's generally a morning after, so to speak. It may be a solid strategy to Buy now in anticipation of that recovery. That sheer level of uncertainty is why I'm neutral on Alibaba.

Disclosure