Now Is The Time To Buy Alibaba Stock

  • Alibaba stock price has fallen by 30% in the year-to-date, but has recovered from its 52 week lows.
  • Globalization, big data and development of the rural economy will drive the Alibaba stock higher over the coming years.
  • While Holiday sales and Alipay could trigger good short term gains, the Alibaba stock is attractive for investors with a long term horizon.

Alibaba (NYSE:BABA) stock price has falls by 31% in 2015, even though it has recovered from its mid-year lows. The fall in the stock price has been in stark contrast to the fundamentals, with the company reporting a Net Income growth of over 500% in its latest quarter.

BABA stock chart

Source: Alibaba stock price data by amigobulls.com

While the stock has been beaten down in 2015, three key trends could fuel growth and drive Alibaba stock higher in the coming years.

3 Key Focus Points To Drive Alibaba Stock Higher

In a recent letter to shareholders, Alibaba chairman Jack Ma wrote, "Our key priorities for the next decade will be globalization, development of the rural economy and big data,” Ma wrote. “At this historic time, Alibaba Group must embrace change, invest in change and drive change."

In order to increase its global footprint, the company is set to open offices in London and Milan, followed by offices in Germany and France. The increasing European presence will help connect local businesses and services with the growing Chinese consumer class, who are well known for their affinity to purchase online.

Acquisitions: Another Key Target Area For Alibaba

Acquisitions have been another key focus area of the 'Amazon of China.' With a purse well-funded by its $25 billion record IPO, Alibaba has been on a shopping spree. Apart from acquiring Youku Tudou (NYSE:YOKU) for $3.6B, the company also bought a large stake in Suning commercial group for $4.6B. Alibaba also has made significant investments in the ride hailing space. With investments across industries, Alibaba looks to buy into multiple markets like Tech, retail and entertainment, positioning itself for continued long term growth.

Conclusion

Alibaba stock, though down in the year-to-date, has rebounded by a good 25% from its October lows. The company is focused on riving the globalisation wave in order to drive long term sustained growth in its core operations. Also, the company's acquisitions and investments across industries will help the company maintain the strong topline growth investors have come to associate with the company. While holiday sales and Alipay could lead to good short term gains in Alibaba stock, this is definitely a company every long investor should consider.

Show Full Article
5 2
Is this article helpful ?    


Neither Amigobulls, nor any members of its staff hold positions in any of the stocks discussed in this post. The author may not be a certified/registered investment advisor, and the opinions expressed should not be treated as investment advice. Buying and selling of securities carries the risk of monetary losses. Readers/Viewers are advised to carry out their own due diligence and consult their investment advisors before making any investment decisions. Neither Amigobulls, nor the author have any business relationship with any of the companies covered in this post.

show more

Comments on this article and BABA stock

Do share this awesome post