If it can go wrong for BABA it probably already has i.e. major Chinese Government intervention (Jack Ma got that wrong!), high valuation tech names falling out of favour as bond yields rise, the potential alienation of Chinese stocks if it helps Russia, to fresh COVID worries. However the stock is now trading on 10.7x earnings significantly below where it was in 2020, remember this business is growing albeit in tricky time for the companies evolution with revenue last year of over $US38bn, in simple terms MM believes the stock is already pricing in far too much bad news.
If we had no position this would be a prime candidate for a speculative buy but its clearly aggressive with so many moving parts on the macro front as we open this morning
MM believes BABA is very cheap under $US80
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