Top pick for 2025 market recovery – Magic Post

It’s the end of the business year 2024. Now that investor attention — and capital — is turning to 2025, some resources may be helpful for figuring out the best ideas and trends to invest in in the coming months. One such resource is Barron’s List of Best Stocks for 2025, which is released at the end of each year and followed by many people for its average accuracy in picking good companies to hold over the next 12 months.

Today’s list included a name that has been the subject of some controversy recently. As part of China’s offshore stocks, it is not a company that has inspired much comfort among investors. However, this is exactly where a true value investor finds his best ideas: when no one else is willing to do the homework because everyone else seems to be against the idea too.

Alibaba Group today

$85.52 +0.38 (+0.45%)

(As of 12/24/2024 at 05:19 PM ET)

52 week range

$66.63

▼

$117.82

Dividend yield

1.15%

P/E ratio

17.35

Price target

$114.07

That stock, or opportunity for that matter, is in the giant technology sector Alibaba Group New York Stock Exchange: Beebeand Barron’s weren’t the only ones who liked the stock enough to express their bullish view on it.

Many Wall Street analysts are also boosting their ratings and ratings for Alibaba stock, not to mention the various institutional investors surrounding the stock near its lows.

Here are some of the reasons Barron’s chose Alibaba this year.

China’s economy is calling for stock buyers

There is a big difference in the bond market in Asia. Today, the returns would make China’s economy with the best risk-reward ratio in the region. Yields have fallen below those of Japan on a 30-year bond basis, meaning markets are now pricing in lower risks and volatility in China than in Japan.

iShares MSCI China ETF today

He walked

iShares MSCI China ETF

$47.71 +0.42 (+0.89%)

(As of 12/24/2024 at 05:19 PM ET)

52 week range

$35.58

▼

$59.78

Dividend yield

2.26%

Assets under management

$5.58 billion

Then there is the fact that iShares MSCI China ETF Nasdaq: Walk It offers a dividend yield of up to 2.5%, which is higher than the current 10-year Chinese bond yield of 1.7%. In any other market, when stocks offer a higher yield than ten-year bonds, there is usually a buying spree.

Well, there hasn’t been this kind of fear in China very often, and that should tell investors that this is a fear-driven market where they can follow Warren Buffett’s advice and “get greedy when others are afraid.” On the other hand, a few large investors quietly built huge positions in Alibaba before it became popular.

Institutional capital flows into Alibaba shares

Over the past few quarters, investors have loved it Michael Burry and David Tepperwhich manages billions in capital for its hedge funds, has made Alibaba shares its largest position in its investment portfolios. And then, even George Soros, who was not very keen on taking positions in foreign stocks, started a multi-million dollar investment in Alibaba.

However, these investors were not alone, as allocators from Sanders Capital decided to boost their holdings of Alibaba stock by 0.3% as of November 2024. This may not sound like a lot on a percentage basis, but it brought their net position to a high of $1.9 billion today. , which places them among Alibaba’s largest institutional shareholders.

What do these buyers see in the company that most Main Street residents seem to miss? Well, this is where retail investors can start taking analyst opinions and sentiment into account. Today’s Wall Street consensus price target for Alibaba stock is $114.1 per share, calling for an upside of up to 35.3% from today’s prices.

However, some are willing to stand outside the group and give Alibaba a more reasonable valuation based on recent price action, such as that of Barclays. These analysts maintained an Overweight rating on Alibaba stock as of November 2024, valuing the company at $130 per share which implies a much larger upside of 54.2% from today’s price.

More aggressive are the targets set by Macquarie as of October 2024, where its outperform rating comes with a valuation of $145 per share. To prove these analysts right, Alibaba stock would have to see a 72% rise to give investors a head start through 2025.

Although these goals are optimistic, they do not reflect the big picture. Analysts believe Alibaba stock will be worth $246 per share in 2021, and based on the company’s financials, that valuation should never have disappeared in the first place.

Knowing that the stock is cheap today, especially since its price-to-earnings (P/E) ratio of 17.1x is well below the retail sector’s average valuation of 108.9x, Alibaba’s management decided Allocate up to $25 billion For the company’s stock buyback program. This is a vote of confidence in the company’s future valuation that investors should not ignore.

Before you consider Alibaba Group, you’ll want to hear this.

MarketBeat tracks the highest-rated and best-performing research analysts on Wall Street and the stocks they recommend to their clients on a daily basis. MarketBeat identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches up… and Alibaba Group was not on the list.

While Alibaba Group currently has a “Moderate Buy” rating among analysts, top-rated analysts believe these five stocks are better buys.

View the five stocks here

Click the link below and we’ll send you MarketBeat’s list of seven stocks and why their long-term outlook is so promising.

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