Is Alibaba (BABA) a Smart Investment Pick?

Distillate Capital Partners LLC, an investment management firm, published its second-quarter 2022 investor letter – a copy of which can be downloaded here. Through the sharp sell-off in the first half of 2022, Distillate’s U.S. FSV strategy held up better than the overall market with a decline of 15.80% net of fees vs. a 19.96% decline for the S&P 500 Index. For the same period, Distillate’s Intl. FSV strategy performed roughly in line with the iShares MSCI ACWI ex-US ETF, posting a total return of -18.07% net of fees versus -18.00% for the benchmark. Meanwhile, Distillate’s U.S. SQV’s 2022 first half total return after fees of -17.22% was better than the total return for the iShares Russell 2000 ETF of -23.48% and the iShares Russell 2000 Value ETF’s total return of -17.43%. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.

In its Q2 2022 investor letter, Distillate Capital mentioned Alibaba Group Holding Limited (NYSE:BABA) and explained its insights for the company. Founded in 1999, Alibaba Group Holding Limited (NYSE:BABA) is a Hangzhou, China-based multinational technology company with a $210.3 billion market capitalization. Alibaba Group Holding Limited (NYSE:BABA) delivered a -32.66% return since the beginning of the year, while its 12-month returns are down by -44.53%. The stock closed at $79.99 per share on September 30, 2022.

Here is what Distillate Capital has to say about Alibaba Group Holding Limited (NYSE:BABA) in its Q2 2022 investor letter:

“Changes & Regional Weights:  The largest new position is Alibaba Group Holding Limited (NYSE:BABA), which underperformed considerably and has seen its enterprise value fall by almost two thirds from its peak despite a net cash position on its balance sheet.”

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Our calculations show that Alibaba Group Holding Limited (NYSE:BABA) ranks 13th on our list of the 30 Most Popular Stocks Among Hedge Funds. Alibaba Group Holding Limited (NYSE:BABA) was in 106 hedge fund portfolios at the end of the second quarter of 2022, compared to 100 funds in the previous quarter. Alibaba Group Holding Limited (NYSE:BABA) delivered a -31.04% return in the past 3 months.

In September 2022, we also shared another hedge fund’s views on Alibaba Group Holding Limited (NYSE:BABA) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q2 page.

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