Alibaba and the Forty Thieves. How Will the Indian Covid Variant Pan Out?

 Quite a few friends, followers and clients have asked about BABA. Firstly, I’ve bought ¼ at around USD250, another ¼ at USD235. Because they were at 200MA. I won’t buy any more because the next step is to wait for the turnaround, otherwise I may run out of money. As long as the business is good, long term trend is up, I will still hold.

 



 

Alibaba’s revenue grew 64% YOY. 3 major strategic investment priorities of domestic consumption, globalisation, and technology / cloud. Valuation is one of the cheapest among e-commerce players like Amazon, JD, Tencent. Against historical valuations, its Forward PE and EV EBITDA are over 1 standard dev below mean.

 



 

EBITA margin has steadily dropped to around 24% while net margin remain stable at 30%.


 


 

https://www.channelnewsasia.com/news/world/covid-19-people-vaccinated-can-avoid-masks-travel-us-cdc-14804602

 

Meanwhile, in the west, they are removing their masks. The worry is they may also have the Bengal strain (Indian variant). It means that by 2nd half of 2021, cases in the west may skyrocket. The vaccination doesn’t prevent transmission. In Singapore, 19 of the 26 infections at Changi were fully vaccinated. It is more infectious, but less deadly. However, if the hospitals are swamped, then death rates will rise.

 

If the west gets hit with higher cases, there may be another lock down after June. The WFH stocks may rise again. MELI, NVIDA, Paypal, SEA Ltd, Square, Shopify, Semiconductor ETF SMH, Applied Materials AMAT, Lam Research LRCX.

 

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