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Alibaba Group Holding Ltd (BABA) Will Make Hay While the Sun Shines

Alibaba group holding ltd

Alibaba Group Holding Ltd should be on the top of your radar as far as Chinese stocks go. This was announced in a new report from Zacks.com. The Zacks Analyst blog on Wednesday highlighted Alibaba Group Holding as one of the stocks to buy. The stock has been promoted and recommended as a “Buy” by Zacks Equity Research. Here are highlights from Wednesday’s Analyst Blog.

Alibaba Group Holding Ltd Will Gain from More Sales

There are fresh signs that local demand has seen a big rise. This is in keeping with the raft of economic data released recently as well as during the last month. All of this indicates that the recovering economy is on a firmer footing than before. Given these developments, the luster of the world’s second largest economy seems to have been restored. Alibaba is one of the select stocks which has been picked. It is set to gain and hence it seems to be a good option at this point.

Alibaba Group Holding Ltd (NYSE:BABA)

The Westpac MNI China Consumer Sentiment Indicator increased from last month’s level of 115.2 to 117.1. This is its highest level in six months. As per Westpac Banking Group, users were ready to pay more for phones, white goods and other technology-related products. Meanwhile, Standard Chartered Plc’s Small and Medium Enterprise Confidence Index increased from 56 to 56.1 in October. As per market watchers, this was an indication that the labor market was in good health. Experts feel that the government will continue to give a big level of liquidity. It will also make use of the concerned economic policy to prop up growth over this year.

Good Time to Fix Pain Points

Earlier this month, official data from the National Bureau of Statistics showed good signs. Growth had increased for the third successive quarter, by 6.7%. This was in line with the official target for the year. Such a reading has dispelled fears of growth falling under the 6.5% mark. For instance, the official manufacturing PMI was flat at 50.4 for September. In August, Alibaba Group Holding Ltd released its Q1 2017 earnings. At that time, the country’s manufacturing activity had touched its best level since October 2014. Fixed asset investment rose from 8.1% to 8.2%, in line with forecasts. Retail sales rose by 10.4% on a year-over-year basis, due to very high online sales.

China’s government can now focus on reining in some of the support measures which have helped boost economic activity. An attempt to cool down the country’s overheated property market seems to be already bearing fruit. New home prices declined by 3.7% in Beijing and also moved lower in Shanghai and Shenzhen. Such fixes are essential to sustain long term growth prospects. Adding BABA may be a prudent option at this time. Analysts at Zacks included the BABA stock in their search based on a good Zacks Rank and other relevant metrics.

In the most recent post-earnings conference call, Vice Chairman Joseph Tsai told analysts that India was a prized market. There, his firm has an investment in Snapdeal as well as an online payments service and mobile browser. Alibaba Group Holding Ltd. is an e-Commerce giant which caters mainly to its native market. Alibaba Group Holding Ltd  is expected to have an earnings growth of 29.1% for the current year. Its earnings estimate for the current year has improved by 0.5% over the last 60 days. The stock has a Zacks Rank #1.

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    Based in Saudi Arabia, Siraj has a strong understanding of and passion for accounting and finance. He has worked for international clients for many years on several projects related to the stock market, equity research and other business, accounting and finance related projects. Siraj is a published financial analyst on the world's leading websites including SeekingAlpha, TheStreet, MSN, and others.

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