This May Be the Cheapest E-Commerce Play on Earth. Shares Could Rise 50% in 2025. -- Barrons.com

Dow Jones12-24 23:42

By Andrew Bary

This article is an excerpt from " Alphabet and 9 More Stocks to Buy for 2025," published on Dec. 13, 2024. To see the full list, click here.

Alibaba may be the cheapest e-commerce and cloud computing investment in the world. The stock, at about $89, trades for just 10 times projected current-year earnings, well below Amazon's 45 times. It also sits on $50 billion of net cash, or about 25% of its market value.

The problem is China's economic woes and the government's mercurial attitude toward homegrown tech companies. Concerns about President-elect Donald Trump's tough-on-China stance and doubts about the effectiveness of the country's economic stimulus are also weighing on shares, which have pulled back from a high of $117 in September.

One fan is superstar hedge fund investor David Tepper, who runs Appaloosa Management. Alibaba is his largest holding, although he did trim the stake in the third quarter.

The company believes that its stock is a bargain and has repurchased 7% in the first three quarters of 2024. "Alibaba is cheap relative to its own history, it's cheap relative to its peers, it's sitting on a ton of cash, and a lot of headwinds are turning into tailwinds," says Burns McKinney, a senior portfolio manager at NFJ Investment Group.

If investors warm to the depressed Chinese stock market, Alibaba could be up 50% in 2025.

Write to Andrew Bary at andrew.bary@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

December 24, 2024 10:42 ET (15:42 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.

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To see the full list,  click here. \n\n\n     Alibaba may be  the cheapest e-commerce and cloud computing investment in the world. The stock, at about $89, trades for just 10 times projected current-year earnings, well below Amazon's 45 times. It also sits on $50 billion of net cash, or about 25% of its market value. \n\n\n     The problem is China's economic woes and the government's mercurial attitude toward homegrown tech companies. Concerns about President-elect Donald Trump's tough-on-China stance and doubts about the effectiveness of the country's economic stimulus are also weighing on shares, which have pulled back from a high of $117 in September. \n\n\n     One fan is superstar hedge fund investor David Tepper, who runs Appaloosa Management. Alibaba is his largest holding, although he did trim the stake in the third quarter. \n\n\n     The company believes that its stock is a bargain and has repurchased 7% in the first three quarters of 2024. \"Alibaba is cheap relative to its own history, it's cheap relative to its peers, it's sitting on a ton of cash, and a lot of headwinds are turning into tailwinds,\" says Burns McKinney, a senior portfolio manager at  NFJ Investment Group. \n\n\n     If investors warm to the depressed Chinese stock market, Alibaba could be up 50% in 2025. \n\n\n     Write to Andrew Bary at andrew.bary@barrons.com \n\n\n     This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal. \n\n\n \n\n\n  (END) Dow Jones Newswires\n\n\n  December 24, 2024 10:42 ET (15:42 GMT)\n\n\n  Copyright (c) 2024 Dow Jones & Company, Inc.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.4","shortVersion":"4.29.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2493003395"}