Alibaba Group Holding Ltd (BABA): Does Hedge Fund Sentiment Indicate Big Things Ahead?

At the end of 2015, renowned short-seller Jim Chanos, founder of Kynikos Associates, pitched Alibaba Group Holding Ltd (NYSE:BABA) as a short-sale bet at the Morgan Stanley Lyford conference, citing “accounting concerns”. The short-selling specialist has expressed his bearish view on China on multiple occasions, so Alibaba’s potential “accounting” issues, along with the nation’s economic woes, might yield the perfect short-selling thesis. Nonetheless, the e-commerce giant continues to achieve exceptional growth despite facing fast-mounting problems in the Chinese economy, so it’s a difficult company to get a good read on. Let’s now look at how the stock was traded in the fourth quarter by the entirety of the hedge funds tracked by Insider Monkey.

How are hedge funds trading Alibaba Group Holding Ltd (NYSE:BABA)?

Heading into 2016, a total of 77 of the hedge funds tracked by Insider Monkey were long this stock, a 28% jump from the third quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their holdings significantly (or had already accumulated large positions).

Of the funds tracked by Insider Monkey, Jim Davidson, Dave Roux and Glenn Hutchins’ Silver Lake Partners has the most valuable position in Alibaba Group Holding Ltd (NYSE:BABA), worth close to $1.99 billion, comprising 28.1% of its total 13F portfolio. On Silver Lake Partners’ heels is Rob Citrone of Discovery Capital Management, with a $861.5 million position; his fund has 10.2% of its 13F portfolio invested in the stock. Some other peers that are bullish include Boykin Curry’s Eagle Capital Management and Ken Griffin’s Citadel Investment Group.

Now, some big names were breaking ground themselves. Silver Lake Partners assembled the largest position in Alibaba Group Holding Ltd (NYSE:BABA). Silver Lake Partners had $1.99 billion invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also initiated a $172.5 million position during the quarter. The following funds were also among the new BABA investors: Eric W. Mandelblatt’s Soroban Capital Partners, Panayotis Takis Sparaggis’ Alkeon Capital Management, and Christopher James’ Partner Fund Management.

On the final page, we’ll compare Alibaba’s popularity to stocks with a similar market cap.