The Tug Of War For BABA
One day removed from making an all-time high of $119.45 (and an all-time high close of $119.15), Alibaba Group Holding Ltd (NYSE: BABA) shares took a breather in Tuesday's session.
It should come as no surprise that the issue had a day in the red, especially considering that Alibaba has traded higher in 14 of the last 16 sessions.
Wall Street Weighs In
On Monday, RBC Capital Managing Director Mark Mahaney made comments on CNBC's Fast Money that may explain the weakness in its share price. He's a long-term buyer but sees limited upside from its current price.
During the appearance, he stressed “valuation” matters and should be taken into account when evaluating the issue. Mahaney, who maintains an Outperform rating and a $130.00 price target, is topped by only Oppenheimer, who revealed a $133.00 price target on Tuesday.
Mahaney stated he's “always liked the story [of Alibaba]” but would “never be a buyer for Singles' Day results.”
In his opinion, the “robust numbers” being reported may not be a true indicator of the actual results.
“If the market is going to extrapolate and say that whatever they print tonight, 50 or 60 percent, and say that will be the growth rate for the quarter, I think that carries some risk,” he added.
A Maven Weighs In
Longer-term, Mahaney admits that for those who want to play the Internet sector in China, Alibaba is the place to be. He characterized the issue as a combination of “Amazon, Ebay and Google of China.”
Echoing the same bullish sentiment was Marketfy Maven and author of “Creating Income With Options Spreads,” Nic Chahine, who weighed in on the issue during Benzinga's PreMarket Prep broadcast Tuesday morning.
“It is an issue you have to buy it and forget about it -- perhaps suitable for my 13-year-old son's account -- look at it in a few years and hopes it pays for part of college," Chahine explained.
He also warned not to subscribe to the "too hard, too fast theory," when trying to determine an entry point in Alibaba.
Investors that did not pay up for Google Inc shortly after its IPO, for example, may have missed the boat.
Latest Ratings for BABA
|Sep 2016||Deutsche Bank||Maintains||Buy|
|Sep 2016||Daiwa Capital||Maintains||Buy|
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