On the heels of Alibaba’s blockbuster quarterly earnings report, Yahoo Finance’s call of the week is hedge fund titans betting big on the Chinese e-commerce giant. Earlier this week, SEC filings revealed that four major investors — David Tepper, Dan Loeb, Stanley Druckenmiller and Julian Robertson — all scooped up shares of the company during the second quarter.
So far, it looks like the so-called “smart money” got this one right. The hedge fund favorite has proven to be a profitable investment this year with shares up about 91% since January 1, hitting a new all-time high this week.
David Tepper’s Appaloosa bought 3.69 million shares during the second quarter, while Stan Druckenmiller’s Duquesne Capital and Robertson’s Tiger Management disclosed new stakes of 710,200 shares and 214,000 shares respectively.
What’s really interesting here is Dan Loeb, founder of Third Point, buying Alibaba (BABA) given his investment history with the stock. In the first quarter of 2015, Third Point dumped its entire stake, about 10 million shares worth $1 billion, in the e-commerce giant. Loeb then stayed out of the stock for about a year and a half before he decided to jump back into the stock. According to an SEC filing, Loeb first jumped back in to the company in September 2016, and as of his most recent 13F filing, he owns 4.5 million shares. In a quarterly letter to investors, Loeb wrote Alibaba is among the “best business models in the global internet sector” and is “currently at a positive inflection point.”
The hedge funds aren’t alone with their bullish bets on the stock. Both Needham & Co. and RBC Capital Markets raised their prices targets to $190 a share and $185 a share respectively following Alibaba’s strong earnings report Thursday. RBC analyst Mark Mahaney said “fundamental trends remain impressive” while Needham analyst Kerry Rice noted the firms FY2018 forecast could be on the conservative side.
According to Bloomberg, Alibaba has a total of 46 buy, four hold and zero analyst sell ratings.