Why You Should buy Alibaba Group Holdings Ltd (BABA) Immediately!

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It’s only fitting that I’m writing about Alibaba Group Holding Ltd (NYSE:BABA), because CEO Jack Ma was in Toronto, my hometown, Sept. 25, to share the stage with Canadian Prime Minister Justin Trudeau.

Appearing at Gateway 17, Alibaba’s conference series to inform and educate North American businesses looking to succeed in China, a market that continues to grow at a pace seen in very few parts of the world, Ma is not shy about telling the company’s story and the big part China plays in its success.

Why should investors care?

It’s an indication how serious Ma and the rest of Alibaba’s employees are about making China’s economy the world leader, far surpassing the U.S.

“China’s middle-class population is projected to exceed 600 million by 2022, or nearly twice the size of the entire U.S. population and 16 times the size of Canada’s,” states the Gateway 2017 website. “With retail spending stagnating in much of the developed world, China represents a unique opportunity for sales growth.”

Alibaba is the Only Chinese Stock to buy

Back in May, I wrote a piece about Alibaba that stated Mad Money’s Jim Cramer would buy only one Chinese stock — and that’s BABA. Cramer’s opinion of Alibaba hasn’t changed in the four months since I pointed this out.

“There is no second to Alibaba, there’s just third, fifth, seventh, eighth, ninth,” Cramer said while discussing another Chinese company, JD.com Inc (ADR) (NASDAQ:JD), during the Sept. 15 edition of Mad Money. “We’re sticking with Alibaba.”

And investors should too.

North Korea Presents Buying Opportunity

BABA stock hit an all-time high of $180.87 Sept. 19 only to fall back on increasing rhetoric between President Trump and North Korean President Kim Jong-Un. InvestorPlace’s Joseph Hargett was quick to suggest that investors buy the dip.

“Any pullback in BABA stock should be seen as a buying opportunity, given the company’s massive upside potential over the next year or two,” wrote Hargett on Sept. 22. “Options traders who followed my advice last month already know that trading short-term dips in BABA stock can be profitable.”

Hargett’s right.

Investors never thought Amazon’s stock would hit $1,000 — until it did at the end of May. The same applies to Alibaba. Trading around $174 as I write this, very few investors, even those long BABA stock, can imagine a four-digit stock price, but assuming it happens at some point in the next decade, buying on the dips makes a whole lot of sense.

The Next Decade

The opportunities, domestically and internationally, for a company like Alibaba, are virtually limitless. It’s possible in 10 year’s time that Alibaba and Amazon.com, Inc. (NASDAQ:AMZN) will control 25% of the global retail revenue, online and off, making BABA and AMZN two stocks you want to own for the next decade.

In July, I included Alibaba in my list of the ten best investments of the next ten years.

“Simply put, Ma is one of China’s shining stars, and although there are lots of people warning against the company’s complex accounting — including Herb Greenberg, who has been railing against BABA since it went public in 2014 — I believe Ma and Alibaba will prove the detractors wrong,” I stated July 14. “The thing I most appreciate about Ma is that he, much like Jeff Bezos, understands that brick-and-mortar retail isn’t dead. In fact, it’s essential to the future of retail — online and off.”

Like Amazon, Alibaba wants to be much more than just an e-commerce company and Ma won’t stop coming up with ways to interact with consumers around the world and, in the process, make himself and his shareholders very wealthy.

Bottom Line on BABA stock

There’s no question Alibaba stock has a history of volatility. I said so so back in January. At the time, I provided investors with some possible alternatives that would soften the blow of any BABA pullback.

Today, I’m less concerned about possible pullbacks and more focused on helping investors benefit from them.

Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.

If BABA falls below $170, buy. If it falls below $160, buy. If it falls below $150, buy.

If we have a significant market correction of any kind — buy, buy, buy.

As of this writing, Will Ashworth did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2017/09/buy-alibaba-group-holdings-baba-immediately/.

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