Here’s Why Distillate Capital Exited its Alibaba (BABA) Position

Distillate Capital, an investment management firm, published its third-quarter 2021 investor letter – a copy of which can be downloaded here. Distillate Capital’s U.S. and International Fundamental Stability & Value strategies returned -1.49% and -7.06% on a net of fees basis for the quarter, respectively. The U.S. portfolio lagged its S&P 500 benchmark by around 2.1% in the quarter, causing the year-to-date performance to trail that benchmark by around 2.2%. The international portfolio likewise lagged its benchmark, the iShares MSCI ACWI ex-US ETF, in the quarter, and year-to-date performance is trailing the benchmark by a more substantial 6.6% after outperformance of around 8.0% last year. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.

Distillate Capital, in its Q3 2021 investor letter, mentioned Alibaba Group Holding Limited (NYSE: BABA) and discussed its stance on the firm. Alibaba Group Holding Limited is a Hangzhou, China-based e-commerce company with a $311.2 billion market capitalization. BABA delivered a -50.67% return since the beginning of the year, while its 12-month returns are down by -51.84%. The stock closed at $114.80 per share on December 29, 2021.

Here is what Distillate Capital has to say about Alibaba Group Holding Limited  in its Q3 2021 investor letter:

“The largest sales in the quarter were the Chinese E-commerce giant Alibaba. While Alibaba is still attractively valued, it is not as attractively valued as other Chinese names after the significant sell-off that has occurred in that region. Alibaba was therefore sold to make room for other Chinese stocks within the limits of the regional weight.”

Based on our calculations, Alibaba Group Holding Limited (NYSE: BABA) ranks 13th in our list of the 30 Most Popular Stocks Among Hedge Funds. BABA was in 115 hedge fund portfolios at the end of the third quarter of 2021, compared to 146 funds in the previous quarter. Alibaba Group Holding Limited (NYSE: BABA) delivered a -22.21% return in the past 3 months.

In December 2021, we also shared another hedge fund’s views on BABA in another article. You can find more than 100 investor letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q3 page.

Disclosure: None. This article is originally published at Insider Monkey.