I do not hold a position. But maybe I should.
Baba is @ $254B market cap. In 2023 they reported a FCF of $21B. That's a 12 price/FCF ratio.
Aapl for some context trades @ $3.54T market cap. In 2023 they reported a FCF of $99.5B. That's a 34.3 price/FCF ratio.
I know it's a chinese stock and they should be "discounted" because of American's perceived risk but this seems a bit excessive of a discount. Even when it was trading at ATH's it had a price/FCF of 4.5 which to me still seems like a screaming buy. Given the recent china stimulus and runup of baba, I think it should still be a buy right as chinese consumers get this stimulus and baba should benefit? Am I wrong here? Are there risks I'm ignoring?
This quick look at baba price/FCF says it's a screaming buy
byu/shakenbake6874 instocks
Posted by shakenbake6874
9 Comments
It screamed buy for the past 8 years – the issue is that it will be worthless if China attacks Taiwan, if the party decides to need money badly, if baba pulls another ant and defrauds adr holders etc…
It’s surely a risk reward play but please stop pretending that everything that was true for the past years is now invalid because of a 20% share price increase…
The good: it’s super undervalued, high buyback ratio.
The bad: 1 digit growth rate, it’s China.
I bought and will keep buying but will sell it all after my target
NoPE NOPE. I have been burnt three times. At 212, 170 and lastly 140. Same story. China is not transparent.
People like you always come out after the stock price sees parabolic growth. It’s up 30% in 1 month, and 50% from its low a few months ago, Yawn.
My cost basis is the mid-70s but I sold half my position at $108. I like it for the long term because it just really is cheap. However, the whole story right now is hinging on Chinese stimulus and I’m not as optimistic that the US investor base will get what they want.
Will be revisiting after I speak with some China specialists this month that have a better understanding of what’s actually going on there.
In the meantime, you’ll never go broke taking profits
I once invested in Chinese stock. Showed insane promise, I ploughed in tens of thousands of dollars. One morning, I wake up and ALL OF IT reduced to a few dollars. Luckin coffee. The brand was a big fucking fraud, kicked out of exchange, became a penny stock overnight.
Never. Buying. Another. Chinese. ADR. Again. Just not worth the cost. Thousands of great companies to chose from, there is no reason to get into that market.
Hell no. The numbers they report cannot be trusted
Also one CCP decision away from annihilation
How much are u buying?