Load Up On This Stock

Alibaba Group Holding Ltd (NYSE:BABA) was up 95% in 2017. That’s pretty impressive given that BABA stock has a $500 billion market cap behind it.

Alibaba stock outperformed its U.S.-based competitors Amazon.com, Inc. (NASDAQ:AMZN) and Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL), by 33% and more than 50% respectively, in the past 12 months.

And it’s significantly cheaper than AMZN stock and only slightly more expensive than GOOGL stock using its price-to-earnings ratio as a yardstick.

What’s even more impressive is the fact that BABA stock isn’t done growing yet. As a matter of fact, CEO Jack Ma expects revenue growth to exceed 45% in 2018.

Alibaba stock isn’t ‘like’ any other U.S. online firm. It is more diversified than AMZN and GOOGL. Yes, it has cloud computing, it’s an online platform for retailers and runs a distribution network and has a significant presence in mobile media.

But BABA stock also offers a lot more.

The Long-Term Strength of BABA Stock

First, it’s the biggest and the best of class in China. That is a big deal because it means it has got to this point with the Chinese government’s approval. You can’t expect to build a business in China, especially on this scale without the government’s approval.

That also has implications for competitors as well. The government can help BABA build a moat around its businesses. While this partnership may play out differently in China, this friendly relationship happens in the U.S. and other places as well.

For example, it was just reported that GOOGL was the top lobbying company in D.C. in 2017. It didn’t spend all that money without expecting something in return.

Second, while China is an enormous market with far more potential organic growth than the U.S. and Europe, Alibaba stock isn’t stopping at its border.

It has developed gaming deals with Indian mobile gaming and gambling firms. BABA has a number of top video games and gambling platforms in China, but 2018 will see their expansion beyond those borders — to the second most populous country in the world.

Third, it is a big company that knows how to think small to make it big. In the U.S., Google’s Chrome operating system is extremely popular since its takes everything with you from mobile, to home, to work.

But its convenience and power is supported by a reliable energy grid and mobile infrastructure. That isn’t the case in developing nations, especially in the hinterland of countries like China, India, Indonesia as well as smaller countries.

BABA has built the UC Browser that’s lighter and better suited for cheaper phones and less reliable connectivity. It already has 430 million global users and that will grow for many years to come.

Fourth, it was recently reported that the company began talking to Kroger Co (NYSE:KR), the biggest grocer in the U.S. by revenue. This would be an incredible opportunity for BABA stock to enter the U.S. market, supporting KR efforts to build out an online operation that could take on AMZN and Wal-Mart Store Inc (NYSE:WMT).

— Louis Navellier

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Source: Investor Place