Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Analyzing Alibaba Group Holding Ltd (BABA)’s Brand Of Soap: Duncan Clark

Some industry observers may be saying that a bubble is about to burst in China but will Alibaba Group Holding Ltd (NYSE:BABA)’s stock be hit if this big correction occurs?

According to Duncan Clark, chairman and founder of BDA China, you have to look at which group of companies in China you are talking about as Alibaba Group Holding Ltd (NYSE:BABA) cannot be hastily grouped with all companies that are in the country.

In an interview with Emily Chang on Bloomberg West, Clark points out that the predicted bubble in China cannot be completely compared with the bubble that burst in 1999, 2000. He says that the bubble at the start of the new millennium saw companies not earning at all. Now, there is certainly more earnings being made, he says.

“However, there has been the massive appreciation [in stock price] as you have said [but] I think we should look at which kind of soap we are talking about. There are different brands of soap in this bubble. There is a domestic Chinese stock market and there we have a second board, the ChiNext in Shenzhen, which is massively overpriced, I think. We also have the Hong Kong shares which are increasingly linked to the mainland. And we have the New York-listed companies including obviously Alibaba. So you have to look at what you are talking about but overall, there has been a big run up, that’s for sure,” Clark tells Chang.

Alibaba, is BABA a good stock to buy, NYSE:BABA, Duncan Clark, bubble, China, NASDAQ:BIDU, Tencent, Xiaomi,

As for overvalued shares, Clark says that in China, industry experts often group Baidu Inc (ADR) (NASDAQ:BIDU), Alibaba Group Holding Ltd (NYSE:BABA) and Tencent Holdings Ltd (HKG:0700) because of their massive market capitalizations. He implies, however, that this group is not often described as overvalued since they have multiple industries they have the potential of being disruptors in.

A company which may be deemed overpriced is Xiaomi, which Clarks points out has a private valuation of over $45 billion. That is an aggressive valuation, he adds, given that the world does not exactly know how the company will make more and more money going forward.

Clark says, however, that if the Chinese economy continues its path and consumer spending slows – add to this a steep rise in stock prices – companies may get hit.

Stanley Druckenmiller’s Duquesne Capital owned 253,900 shares in Alibaba Group Holding Ltd (NYSE:BABA) by the end of 2014. The Alibaba Group Holding Ltd (NYSE:BABA) stake, valued at about $26.39 million and is 2.58% of Duquesne Capital’s whole portfolio, increased a staggering 2,439% quarter over quarter.

I just made 84% in 4 daysI Just Made 84% in 4 Days By Blindly Following This Hedge Fund

I just made 84% in 4 days by blindly imitating a hedge fund’s stock pick. I will tell you how I pulled such a huge return in such a short time but let me first explain in this FREE REPORT why following hedge funds’ stock picks is one of the smartest things you can do as an investor. We launched our quarterly newsletter 2.5 years ago and not one subscriber has, since, said ‘I lost money by EXACTLY following your stock picks’. The reason is simple. You can beat index funds by creating a DREAM TEAM of hedge fund managers and investing in only their best ideas. I just made 84% in 4 days by blindly imitating one of these best ideas. CLICK HERE NOW for all the details.

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!