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Polen Capital is Betting on Alibaba Group Holding (BABA) Stock

Alex Smith
·3 min read

Polen Capital Management recently released its Q3 2020 Investor Letter, a copy of which you can download here. During the third quarter of 2020, the Polen Global Growth Composite Portfolio returned 9.09% gross of fees, while the MSCI All Country World Index was up 8.14%. You should check out Polen Capital’s top 5 stock picks for investors to buy right now, which could be the biggest winners of this year.

In the said letter, Polen Capital highlighted a few stocks and Alibaba Group Holding Limited (NYSE:BABA) is one of them. Alibaba Group Holding Limited (NYSE:BABA) is a China-based e-commerce company. Year-to-date, Alibaba Group Holding Limited (NYSE:BABA) stock gained 44.4% and on October 22nd it had a closing price of $306.28. Polen Capital cared to mention Alibaba Group Holding Limited (NYSE:BABA) in its investor letter, though they didn’t say why they really like the stock. All they said is this:

"Alibaba reported strong results for the quarter ended June 2020 with revenue growth accelerating to ~34% in contrast to ~22% in the prior quarter, as COVID-19 cases remain well contained in China. As previously noted, China has seen a strong recovery overall. Alipay, owner of Ant Group, in which Alibaba has a ~33% interest, also filed to go public during the quarter. A better appreciation of Ant Group’s potential value may have contributed to Alibaba’s share price performance as well."

Alibaba Group Holding Ltd (NYSE:BABA), Booth of Alibaba Group, IT tradew show, website, group, chinese
Alibaba Group Holding Ltd (NYSE:BABA), Booth of Alibaba Group, IT tradew show, website, group, chinese

Pieter Beens / Shutterstock.com

Earlier this month, we published an article revealing that Alibaba Group Holding Limited (NYSE:BABA) stock has outperformed the S&P 500 Index in the trailing one year period.

In Q2 2020, the number of bullish hedge fund positions on Alibaba Group Holding Limited (NYSE:BABA) stock decreased by about 8% from the previous quarter (see the chart here), so a number of other hedge fund managers don't believe in Alibaba's growth potential. Our calculations showed that Alibaba Group Holding Limited (NYSE:BABA) is ranked #4 among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds' poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free enewsletter below to receive our stories in your inbox:

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