Alibaba (BABA) is a “Growth at a Reasonable Price” Opportunity

Alibaba – The Chinese Amazon is one of the stocks I get asked about all the time. This is what I would call a growth at a reasonable price (GARP) opportunity. There are some very interesting points I will go over with the company in this video.

Alibaba is a company that I was asked to analyze several times by subscribers. Consequently, with this video I presented an analysis by the numbers. The company has listed its ADR on the New York Stock Exchange which has strict rules.

It is also rated A+ by Standard & Poor’s. Nevertheless, there was one fact in consideration that I intended to mention but overlooked when I prepared the video. Here is a summary courtesy of Zacks investment research on information that I believe all investors should be aware of:

Zack’s Summary

“Alibaba’s business structure involves certain risks due to the strict laws in China. According to Chinese laws, it is illegal for a foreigner to own stocks in any Chinese Internet company, which implicates that a foreign investor cannot be a real stockholder in Alibaba.

Therefore, all foreign investors who bought Alibaba shares on the NYSE actually purchased stocks of the holding company called Alibaba Group Holding Ltd registered in the Cayman Islands and not that of the actual Alibaba. Therefore, they have no voting rights in the company or against any of its assets, including Taobao and Tmall. The investors will only receive a share in Alibaba’s profits, with no ownership rights.”

FAST Graphs Analyze Out Loud Video:

— Chuck Carnevale

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Source: FAST Graphs