Top 5 Stocks Billionaire Larry Robbins Just Added to His Portfolio

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Below we present the list of the top 5 stocks billionaire Larry Robbins just added to his portfolio. For more background on the billionaire investor, as well as our methodology and a more comprehensive list of Larry Robbins’ newest stock picks, you can go directly to Top 9 Stocks Billionaire Larry Robbins Just Added to His Portfolio.

5. Alibaba Group Holding Limited (NYSE:BABA)

Value of Glenview Capital’s 13F Position: $9.84 million

Number of Hedge Fund Shareholders: 97

Hedge funds have been abandoning Alibaba Group Holding Limited (NYSE:BABA) in droves in recent quarters, as 35% of the Chinese ecommerce giant’s former hedge fund shareholders sold off their positions in the second half of 2021. Larry Robbins took a contrarian stance, buying 82,789 BABA shares during Q4.

Alibaba Group Holding Limited (NYSE:BABA) shares have fallen by nearly 50% over the past year owing to a myriad of factors that have impacted not only the company’s own growth rate but the entire Chinese online market as well. Online retail sales in China slumped to just 5% growth in the third quarter, which lead Alibaba to make a significant downgrade to its fiscal year outlook, slashing it by close to 33% on both the upper and lowers ends of the range.

Longleaf Partners International Fund discussed the above issues as well as some of the other rationale behind its decision to sell off Alibaba Group Holding Limited (NYSE:BABA) during the fourth quarter in the fund’s Q4 2021 investor letter:

Alibaba (-50%, -2.26%; -22%, -0.82%), the largest online retail platform in China, was another top detractor for the year and in the fourth quarter. Alibaba reported weak quarterly results and downgraded its sales outlook for the current fiscal year to 20- 23% growth, down from the original guidance of 29-32% growth. Macro headwinds, weak consumer sentiment, regulatory scrutiny and competitive forces are having a larger than expected impact on overall retail sales and Alibaba’s market share. Notably, overall retail sales in China slowed down to a meager 5% growth in the September quarter. Slowing consumption, combined with stiff competition from new entrants in live streaming e-commerce, have resulted in transitory deceleration in Alibaba’s core ecommerce growth trajectory. Additionally, the company is accelerating strategic investments in new initiatives, including Community Group Buying (Taocaicai), Taobao Deals, Local Consumer Services and International Ecommerce. These are future growth drivers but are depressing company’s earnings today. In December, we exited our full position in Alibaba. This was more of a tactical move than a change in investment conviction. We initiated the position early in 2021, and the continued challenges in the second half of the year resulted in a loss that was material enough to be helpful from a tax distribution management point of view. We are sensitive to taxable gains and try to minimize where sensible, so we took advantage of the opportunity to reduce that liability and plan on revisiting the Alibaba opportunity in 2022. We continue to own Alibaba in our Asia Pacific strategy.”

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