5 Best Low Volatility Stocks to Buy According to Hedge Funds

4. Alibaba Group Holding Limited (NYSE:BABA)

5-yr Monthly Beta: 0.46

Number of Hedge Fund Holders: 116

Alibaba Group Holding Limited (NYSE:BABA) is a Chinese company that provides services and products focused mainly on e-commerce, retail, Internet, and technology. The stock has a 5-year monthly beta of 0.46.

On April 2, Alibaba Group Holding Limited (NYSE:BABA) announced that it bought back 524 million ordinary shares for a total of $4.8 billion in the U.S. and Hong Kong markets during the quarter ended that on March 31. Under its share repurchase program, for the fiscal year that ended on March 31, the company repurchased 1.249 billion ordinary shares (156 million American Depository Shares) for $12.5 billion.

116 hedge funds held positions in Alibaba Group Holding Limited (NYSE:BABA), with total positions worth $3.587 billion in the fourth quarter of 2023. This is compared to 110 funds with positions worth $3.36 billion in the third quarter. As of Q4 of 2023, Appaloosa Management LP is the most prominent shareholder in the company with a position worth $337.168 million.

Artisan Partners stated the following regarding Alibaba Group Holding Limited (NYSE:BABA) in its fourth quarter 2023 investor letter:

“Pretty much all of our holdings rose during the quarter. Only one stock declined by more than a couple of percent—Alibaba Group Holding Limited (NYSE:BABA), which was down 9% for the quarter and 12% for the year. This investment continues to be a disappointment. We estimate the shares are trading at around 5X EBITA—a valuation normally reserved for a company with evaporating profits. While it’s true Alibaba is underperforming its peers in the market, the fact is it remains the market leader in its core businesses, and the business is still growing. In the most recent quarter, revenues grew 9% and profits grew 26%.It’s not evaporating.

The management seems to be making meaningful changes designed to enhance shareholder value, including structural changes to improve profitability and restore its competitive position. It is monetizing non-core assets and making improvements in capital allocation. A lot of good things are happening that are not yet recognized in the share price. There are reasons—primarily geopolitical—for this, but at the current valuation, we could easily see the shares double and they would still be cheap.”