Before we spend many hours researching a company, we’d like to analyze what hedge funds and billionaire investors think of the stock first. We would like to do so because the elite investors’ consensus returns have been exceptional. The top 30 mid-cap stocks among the best performing hedge funds in our database yielded an average return of 18% during the last 12 months, outperforming the S&P 500 Index funds by double digits. Although the elite funds occasionally have their duds, such as SunEdison and Valeant, the hedge fund picks seem to work on average. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Alibaba Group Holding Ltd (NYSE:BABA).
Is Alibaba Group Holding Ltd (NYSE:BABA) a healthy stock for your portfolio? Hedge funds seem to think so as the number of bullish hedge funds surged by 35 lately and BABA was included in the portfolios of 104 funds from our database at the end of the third quarter of 2016. However, it’s important to mention that the level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Novartis AG (ADR) (NYSE:NVS), The Coca-Cola Company (NYSE:KO), and Oracle Corporation (NASDAQ:ORCL) to gather more data points.
To the average investor there are several signals investors put to use to size up publicly traded companies. A duo of the less utilized signals are hedge fund and insider trading interest. We have shown that, historically, those who follow the top picks of the best money managers can outclass the broader indices by a significant margin (see the details here).
With all of this in mind, we’re going to take a peek at the recent action encompassing Alibaba Group Holding Ltd (NYSE:BABA).
Hedge fund activity in Alibaba Group Holding Ltd (NYSE:BABA)
Heading into the fourth quarter of 2016, a total of 104 of the hedge funds tracked by Insider Monkey were long this stock, up by 51% from one quarter earlier. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Silver Lake Partners, managed by Jim Davidson, Dave Roux, and Glenn Hutchins, holds the biggest position in Alibaba Group Holding Ltd (NYSE:BABA). Silver Lake Partners has a $859.5 million position in the stock, comprising 17.8% of its 13F portfolio. Sitting at the No. 2 spot is Chase Coleman of Tiger Global Management LLC, with a $568.5 million position; the fund has 8.2% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish include Stephen Mandel’s Lone Pine Capital, Cliff Asness’s AQR Capital Management and Ken Fisher’s Fisher Asset Management.