5 Stocks to Invest in Today According to Billionaire Kerr Neilson

Below is the list of 5 stocks to invest in today according to billionaire Kerr Neilson’s portfolio. For a detailed discussion about Kerr Neilson’s investment philosophy and portfolio management strategies please see 10 Stocks to Invest in Today According to Billionaire Kerr Neilson.

5. Alibaba Group Holding Limited (NYSE:BABA)

Platinum Asset Management’s Stake Value: $161 million

Percentage of Platinum Asset Management’s 13F Portfolio: 4.53%

Number of Hedge Fund Holders: 116

Billionaire Kerr Neilson’s Platinum Asset Management lifted its stake in Alibaba Group Holding Limited (NYSE:BABA) by 176% during the third quarter to 4.53% of the entire portfolio. Shares of Alibaba remained under pressure over the past couple of quarters due to regulatory issues.

Palm Capital, an investment management firm, mentioned a few stocks including Alibaba in the third quarter investor letter. Here is what Palm Capital stated: 

“Over the past few months, political and regulatory turmoil has caused sharp collapses in the share prices of certain Chinese companies and clients have been increasingly asking us why we don’t invest in the country.

When we’ve answered this question in the past, we’ve found it useful to use the example of Alibaba. On face value, Alibaba appears to be a phenomenal business. It is the world’s largest e-commerce company in the world’s fastest-growing major economy. The marketplaces it operates are the most highly visited in China pointing to seemingly unassailable network effect advantages. These are solidified by its substantial investments and partnerships in an unrivalled logistics network. The company also has a crucial early mover advantage in cloud computing giving it a scale advantage that may quickly take it out of reach of competitors. And relative to its growth, the share often appears to be cheap.

However, if you dig beneath the surface, the investment case becomes less clear.

Alibaba’s accounting is questionable and murky, and its disclosure is poor. The company’s corporate structure is an intricate web of over 1,200 separate entities. And a staggering 890 of these entities were formed or acquired in the three years ending 2020. A large portion of its revenue growth each year is from consolidation of acquisitions with little disclosure of just how much. Significant entities appear and disappear from the company’s disclosures from year to year with no explanation. And almost three-quarters of the company’s total retained earnings since its 2014 IPO is from asset write ups with little explanation to back these up.”