JPMorgan dubbed Alibaba Group Holding Ltd (NYSE: BABA) as “uninvestable” earlier this week. Interestingly, however, shares of the Chinese tech giant have shot up about 35% ever since.
Alibaba stock is still inexpensive
Despite the significant rally, Lead Edge Capital’s Mitchell Green says Alibaba is still a cheap stock to own. This morning on CNBC’s “Squawk Box”, he said:
Alibaba is now trading at about ten times next year’s earnings. That’s certainly cheap. I think if you buy stocks at about seven times earnings for stuff that grows fast, you tend to make money. So, it sure is cheap from a risk-adjusted reward.
Green has a similar outlook on China’s Tencent Holdings Ltd as well. Chinese tech stocks have recovered significantly over the past couple of sessions.
Green is a shareholder of Alibaba
The founding partner of the growth equity company finds it convenient to buy BABA and is free of concerns related to investing in offshore entities. He added:
I’m not worried about these offshore entities at all. We own a bunch of Alibaba stock. I do personally on the phone. You can own it in Hong Kong or you can own it in the ADR and it’s remarkably easy to convert your ADR shares into Hong Kong shares.
Chinese tech stocks received a massive blow at the start of this week, following reports of new COVID infections that resulted in another lockdown. Beijing’s involvement with Russia has been hurting sentiment as well.
The post Alibaba stock recovers 35%: is it too late to buy? appeared first on Invezz.
Source: https://invezz.com/news/2022/03/18/alibaba-stock-recovers-35-is-it-too-late-to-buy/