| | | BABA. I sold all my large cap Chinese stocks except for a few shares of BABA. Several reasons:
One has to be wary because of the structure (refer to Sun Tzu comments on Alibaba thread).
I see a company so huge and going into so many aspects of business, that I wonder what will move the needle or if the company will ever deploy some monies to dividends for stockholders. May be too that Chinese government will frown on BABA ever paying cash to stockholders if so many are foreigners. I would like to see dividends or maybe share buybacks or something else that would show some concern for stockholders.
What I actually see is that the company is a retail seller. That's how I'm involved anyway: Is there anybody else reading this who shops and buys things from Alibaba as I do? And so I'm bombarded by their ads every day. They are getting a little better in targeting me, but they've a long way to go. (A lot of the ads are for female stuff or other things I've never expressed an interest in.) So yes, from my prospective I'm with Munger - it's a retailer basically.
Glancing at Yahoo's numbers, the p/e is 10, profit margin is poor, sales growth has slowed to trickle, return on equity is poor. It's big, is involved in several promising area, has resources - people and money for that. It seems likely it faces plenty of strong competition in its home market. I look at value investor pros regarding their views -- some seem to be selling down their shares while others are buying. Buryville18, are you interested in BABA because Mike Burry has reported a position in BABA? If he has a unique perspective on BABA, I don't see it.
BABA for a few shares? Maybe. BABA as a stock to get excited about? I say there's got to be others better elsewhere. Jmo. (And I've been wrong many, many times.) |
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