Shares of Chinese e-commerce giant Alibaba Group (BABA 4.98%) gained 54.7% in 2019, according to data from S&P Global Market Intelligence. Alibaba started to pull away toward a strong year-end performance in the fall, pairing a fantastic second-quarter report with a Hong Kong-based cash infusion.
Alibaba's stock got off to a strong start in 2019, rising as much as 40% year to date in early May. The stock backed down to a 9% gain one month later as investors were spooked by the intensifying Chinese-American trade wars. In September, Alibaba founder Jack Ma retired from this post as board chairman. Ma relinquished his CEO title a year earlier, so this was simply the next step in a long-planned process, but investors were still shaken by the news.
The stock didn't start a real rebound until early November when a fantastic second-quarter report started to dispel the trade-war fears. The Singles Day shopping event later that month continued to drive share prices higher, as Alibaba posted a record of $36.5 billion in sales on China's version of Black Friday/Cyber Monday. Alibaba also launched a stock offering on the Hong Kong exchange, adding $15 billion of fresh shareholder capital to its coffers.
Long story short, Alibaba's business looks as healthy as ever. The trade wars have hardly slowed down the company's incredible sales growth, which feeds into an equally fantastic cash machine of a business model. The company generated $24.3 billion of free cash flows over the last four quarters based on $64.6 billion in top-line revenues.
It's no surprise to see Alibaba overcome a plethora of speed bumps to post strong returns in 2019. We should see more of the same in 2020 and beyond.