TommyBoy---No need to get snarky. Apple's PE is now a little over 13. BABA's is 57. Forward PE's are 16 and 23 respectively. It looks to me that BABA's PE is already pricing a pretty robust EPS growth outlook. I'll stick with $101-105 price target this year. About $6-9 over Goldman Sachs' target.
Loeb's exit was in Q-1. Probably contributed to some of the Q-1 decline.
With that selling pressure out of the way, BABA is more free to edge on up from here.
It's easy to get wildly enthusiastic about BABA and to think of $140-150 target prices in the near future. But we need to remember the market cap is huge-huge and that the insane post-IPO buying is in the past. I do firmly believe BABA's sound management and quarterly performance will drive the stock price up 15-20% this year. That would put it in the $100-105 range. With 7.5 months remaining, the rate of growth in the stock prive would annualize above 30%...Not a bad rate of return.
I have no idea why you think taking a 10% position in a small company with a 120 PE ratio will boost the price of company with a $216 billion market cap.
Anyone can throw around target prices...from $95 to $110 or $140....and time frames from the end of 2015 to the end of 2016 or beyond.
A good discipline is simply to start with analysts' estimated EPS for 2015 of $2.82. Consider that this would be 25% growth over 2014. Think about the 2016 estimated EPS of $3.77..That would be 33.7% growth over 2015.
Now pick a reasonable PEG (price/earnings/growth) factor. For BABA, this could arguably range from 1.2 to 1.6. [The 1.2 is, on my opinion a bit low and the 1.6 is probably on the high side.]
Taking PEG of 1.2 times the 2015 growth rate of 25(%). you get a forward PE of 30. Apply that to 2015 estimated EPS and there's a target price of $84.60. (That's $2.82 times 30).
More optimistically, try to PEG ratio of 1.6...a little stretch but probably supportable for a fast growing EPS stream. Apply that to the 2015 EPS growth rate of 25(%), and you get a forward PE multiple of 40. Apply that to 2015 EPS of $2.62, and that gives a price target of $104.8.
Repeat all of this using the same forward PE's of 30-40 applied to 2016 Estimated EPS of $3.77 and you get price targets ranging from $113.10 to $150.80. Also consider that estimated 2016 EPS of $3.77 would represent 33.7% growth over 2015 estimated EPS, so the 30-40 PE multiples are easily warranted.
What I take from this is that the downside price on BABA is likely around $84.60...and this is likely to be seen next week on a pullback...The much better news is that the upside over the next several months is likely to be around $104.80 and is likely to move on to the $113-151 range over the next 18 months or so.
I fully expect there to be a good deal of price volatility if you want to play short-term trades. Or just hold on and watch BABA move on up to $125-150 in the next 18 months or so. That's 44% to 72% growth from $87.
This, in my view, is a heck of an attractive upside vs downside bet with only about $2-3 of downside and a whole lot of upside.
Sentiment: Strong Buy
Ad this is how BIDU got from 250 to 200. Maybe it will grow from here, but this stock will only respond to quarterly earnings beats and raised outlook. If QII disappoints, look for BIDU to hit $175.
Okay, I see where you got 38%...Analyst estimates of REVENUE growth in 2014 vs year ago...But EPS growth is projected at only 18.5%...That's the problem. Even giving BIDU at PEG of 1.5. that would calculate to a target PE of 27 and this PE times estimated $7.13 EPS for 2015 calculates to a fair market price of about $198. That's about what Jeffries came up with.
Just my thinking...
Per YaHoo Finance, estimated EPS for 2015 are $7.13, about an 18% YoY increase. With the transition to mobile, R&D investments, competitive climate, etc., one could stretch and assign a P/E of 25...giving a fair market price per ADS of about $178.
Why? Giving hundreds of millions to shareholders in buy backs to save a 1.5% dividend yield says Apple has nothing better to do with its money. It's that simple. There a many, many good companies Apple could buy that could return a lot more that 1.5%. Apple has been bullied by Wall Street goons like Icahn to buy back stock instead of investing in making the company bigger and more diversified.
Let's hope earnings well exceed street expectations. As to the crazy daily swings, I think I can shed some light on them. Over 84% of BIDU is held by institutions. This leave very few shares outside institutions to buffer the daily swings. This make BIDU a great playground stock for fast traders, hedge funds, and others who literally can make the stock dance with a series of properly timed and properly structured buy and sell orders. At least this is my opinion. Wish it could be documented.
Price Action -- Looking at the 6-, 15-, 30-, and 50-day moving averages, this looks to me as if there's a fairly good chance that BKR-B will meander its way to $140 or even get to $135 before forming a base. The money flow index also shows no buying strength. I know to Berkshire lovers, this is heresy or it's an insignificant move. My view is that is there's a fair chance of losing another 5-10 dollars per share, step aside and wait for a better entry point. I'm out today at $143.81. I think the biggest risk of being out now is that Berkshire could announce a huge European acquisition at any time. With the dollar so strong, the time is now.
I'm 6K units long and was playing for a rebound from $15.60 (my basis) to the $16-18 range then we get this OPEC news and the 6.3% drop in WTI. FYI, for the last month, MEMP has been falling a lot faster that WTI on a percentage basis. I'm girding for a 8-10+% drop in MEMP on Friday. However, a very contrary view when there is bad news on the horizon is "sell the rumor and buy the news". There's an outside chance that oil and E&P MLP's have been sold off ahead of OPEN and now could actually bounce up tomorrow, but I'm certainly not banking on it.
It's a bit late to pull off a put play, but if put prices hold at the open, one could buy the Dec 20 $17.50 put for $2.75 the exercise the put for a $2.50 gain against a $2.75 cost...limiting loss to $.25.
I've not done such a put play in the past, but it seems to make sense if the $2.75 ask holds and one wants to protect against a potentially big downside move in price.
Longer term, I expect that global demand will grow to soak up the 1 mil/day excess supply (only 3% growth in demand will take car of 1 mill Bbl/D) and this should lead to some upward movement in oil prices...back to the mid- to upper $80's...or even higher by the end of 2015 or early 2016. Time will tell. In the meantime, I expect tomorrow will be a tough day, unless a lot of short covering occurs on oil.
Sorry this post doesn't offer much in the way of good strategy.
Best of luck to all.