In this video, I will be talking about Alibaba (BABA -0.54%), the reason Charlie Munger sold 50%, and why Wall Street analysts still like the company. You can find the video below, but here are some highlights.
- Earlier this year, Charlie Munger doubled down on an investment in Alibaba Group Holding for the second consecutive quarter.
- A couple of quarters later, he sold 50% of his position at a 20% loss. Whether he was forced to sell or converted to Hong Kong shares remains to be seen.
- Wall Street has been super bullish on Alibaba stock for quite some time now. Among 16 analysts, only one holds a sell recommendation. All the rest hold a strong buy stance. The average price target for the next 12 months is $174, which implies an expected upside of more than 80%.
- Last quarter the company said it has reached a total of 1.28 billion annual active consumers.
- EPS came in at $2.65, down 23% year over year (YOY) but ahead of estimates of $2.55. Revenue came in at $38.1 billion, up 10% YOY but below estimates of $38.9 billion.
- Market research firm IDC expects the cloud industry in China to grow by a compound annual growth rate of over 30% until 2025, reaching $87 billion by 2025. Alibaba expects that number to be more than double at $157 billion. Alibaba Cloud has a 37% market share in mainland China.
- Alibaba's growth is slowing down, and investments in various areas hit its bottom line. Investors should take all of this into consideration as well as the China risk surrounding these stocks.
For full insights, do watch the video, consider subscribing, and click the special offer link below.
*Stock prices used were the closing prices of April 14, 2022. The video was published on April 15, 2022.