Alibaba: Nothing Has Changed To Make Buys Compelling (Archive)

This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.

Elevator Pitch

• I have been skeptical of buys on Alibaba. It looks like this view has been accurate so far; since my last update, BABA has lagged the SPY by 12.13%.
• Revenue growth is still lackluster, particularly in the most relevant segment of China Commerce, due to a reduction in take rates and customers' preferences for lower-priced items.
• I had mentioned margin expansion upside as a key upside risk in my last update. But this is not playing out so far, except in the Cloud Business.
• Valuations, of course, continue to be low, but I believe this is insufficient as I require a strong sales rebound catalyst to justify fresh buys.
• Major investors continue to be bullish on Alibaba, including David Tepper's fund, which now has the stock as its largest holding. But I prefer to not fight the bearish trend until it starts to turn.

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