178.12 -0.13 (-0.07%)
Pre-Market: 6:35AM EDT
|Bid||178.01 x 1100|
|Ask||0.00 x 4000|
|Day's Range||175.59 - 178.80|
|52 Week Range||129.77 - 195.72|
|Beta (3Y Monthly)||1.84|
|PE Ratio (TTM)||50.98|
|Earnings Date||Aug 21, 2019 - Aug 26, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||221.29|
Aug.18 -- Sunny Bangia, deputy portfolio manager at Antipodes Partners, talks about Asian and U.S. stocks, corporate earnings and his investment strategy. He speaks with Bloomberg's Paul Allen and Shery Ahn on "Bloomberg Daybreak: Australia."
(Bloomberg) -- So challenging are the times for Baidu Inc. that even meager revenue growth is cause for celebration.The Chinese search leader’s shares surged as much as 10% in extended trading after it reported sales inched up 1.4% to 26.3 billion yuan ($3.8 billion) in the June quarter, versus projections for a drop. Baidu foresees current-quarter revenue of 26.9 billion yuan to 28.5 billion yuan, flat to down a tad and roughly in line with estimates.The better-than-expected results will soothe investors’ worries for now that the 19-year-old company is losing steam rapidly as China’s internet evolves from desktop to mobile. Yet it continues to grapple with a broader economic slowdown as well as competition for advertisers from Tencent Holdings Ltd. and ByteDance Inc. The latter is chipping away at Baidu’s ad sales via increasingly popular news and social media apps, and also recently launched a general search engine -- a direct challenge to Baidu’s core business.“Facing severe outside challenges and a weak macro environment, the company has initiated a series of groundbreaking changes from top to bottom, involving company structures, personnel moves and business consolidation,” Baidu Chief Executive Officer Robin Li said in a letter to employees after the results. “Despite periodic pain, these changes will have positive and profound impact, enabling Baidu to walk farther and steadier.”Read more: Baidu’s $66 Billion Dive Knocks It Out of China’s Internet Top 5Net income dropped to 2.41 billion yuan, reversing a loss in the prior quarter -- Baidu’s first since going public in 2005. The company enjoyed a near-monopoly in online search after Alphabet Inc.’s Google exited China in 2010 but has in past years suffered a plethora of troubles from a regulatory clampdown over healthcare ads to the departure of a slew of top executives including Xiang Hailong, a 14-year veteran who ran its core search business.The search giant is betting on new technology such as artificial intelligence and self-driving cars, but these pushes aren’t going to pay off financially any time soon. In the meantime, Baidu is investing in content to hold onto users, backing social media platforms including Q&A site Zhihu and science sharing platform Guokr. Daily active app users climbed 27% in the June quarter to 188 million, while subscribers on its Netflix-style iQiyi service grew by about 50% to 100.5 million in June.Baidu had fallen off the list of China’s five most valuable internet companies, trailing Meituan and NetEase Inc., after shedding more than 40% of its market value this year. Once touted as a member of China’s tech triumvirate alongside Alibaba Group Holding Ltd. and Tencent, Baidu has been left behind as the country’s internet evolves.Baidu’s forecast “indicates continued pressure from multiple headwinds, including China’s weakening macroeconomic environment hurting advertisers’ sentiment, the company’s cleanup of low quality health-care advertisers, and the large influx of competitive advertising inventory depressing industry prices,” Bloomberg Intelligence analyst Vey-Sern Ling said.To contact the reporter on this story: Zheping Huang in Hong Kong at firstname.lastname@example.orgTo contact the editors responsible for this story: Edwin Chan at email@example.com, Colum Murphy, Peter ElstromFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Alibaba’s (BABA) stock climbed nearly 11% over the past three trading days, as investors are becoming more optimistic on the heels of a strong earnings report and positive geopolitical news. Specifically, first-quarter revenue skyrocketed 42% since last year, crushing estimates by $880 million, while EPS came in at $1.83, beating Wall Street by $0.34. The stock was also fueled higher by Trump administration's decision to pause tariffs on Chinese goods. Though the trade war is far from over, the decision should provide some breathing room for investors and signals that the tit-for-tat will be suspended for the time-being.Given the encouraging developments, Stifel analyst Scott Devitt maintained a Buy rating on BABA stock, while slightly raising his price target by $5, to $225.As always, we like to give credit where credit is due. According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, Devitt has delivered to his followers a yearly average return of 20.4% with a 67% success rate. Devitt has earned an average return of 26.3% when recommending BABA and is ranked 44 out of 5,231 analysts.The analyst says the increase in revenue and margin, which “exceeded expectations despite macroeconomic concerns,” helped push his estimates higher. Revenue, which grew 42% and exceeded Devitt’s estimate of 38%, was propelled by an increase of 20 million active customers, up 17% since last year. Further, high-margin customer management revenue, which includes services provided to merchants, increased 27% since last year, “due to strong volume in paid clicks from strong active growth and more relevant listings.” On the non-retail side, the all-important cloud revenue saw an increase of 66% since last year, as the company managed to see more spending per customer. On profit, Devitt says, “tightening expense management” drove better than expected results, with “EBITDA margin of 34% exceeded consensus expectations of 31% and [Devitt’s] forecast of 33%.” Smaller losses from cloud and digital media helped the company see a rise in total margin since last year. Looking ahead, Devitt says he is “encouraged by the margin improvement as progress is being made in strategic investments,” and raising his estimates to include a 37.5% year-over-year rise in full-year revenue between this year and last. While macroeconomic challenges continue to play a role, Devitt’s concern is lessened by Alibaba’s ability to navigate it the rough waters thus far. All in all, even as much of the world is concerned with the US-China and a slowing global economy, TipRanks analysis of 15 analyst ratings shows that analysts believe in Alibaba, notwithstanding the macro concerns. TipRanks shows a consensus Strong Buy, with all 16 analysts recommending Buy. The average price target stands at $223.93, which represents ~25% upside from current levels. (See BABA's price targets and analyst ratings on TipRanks)
Even as the global economy weakens, there are opportunities to add stocks in a long-term portfolio. Alibaba Group (NYSE:BABA) is among the top stocks to consider with a three-to-five-year investment horizon. This coverage on Alibaba stock will discuss the factors that will help the e-commerce giant sustain robust growth in the coming years.Alibaba stock is almost at the same level it was in August 2018 even after strong quarterly results and attractive valuations. I believe that this sideways movement is a good opportunity to accumulate the stock. A break-out on the upside is inevitable in the foreseeable future. China's Consumption Boom and BABA StockChina's economic downturn is primarily due to manufacturing and production excesses. China's consumption sector still remains healthy.InvestorPlace - Stock Market News, Stock Advice & Trading TipsTo put things into perspective, China will be the largest retail market in 2019. Further, it is expected that between 2019 and 2024, China's retail sector will grow at a CAGR of 10.6%. * 10 Cheap Dividend Stocks to Load Up On According to a report from McKinsey & Company, 78% of GDP growth in the first nine months of 2018 was driven by consumption. The report also states that 6% GDP growth in 2019 is likely only if the consumption boom sustains.Therefore, with consumption critical for growth, the government will support policies that trigger the consumption boom. In addition, I believe that the Chinese Yuan will appreciate in the coming years which will increase the purchasing power of consumers.Overall, China is moving from a manufacturing boom to a consumption boom. Very similar to the manufacturing boom, this trend is likely to sustain in the coming decade.Alibaba Group and BABA stock are well-positioned to benefit from the boom with a healthy growth in active users. Koala Acquisition a Alibaba Stock Upside CatalystThere are reports that Alibaba Group will be buying NetEase's (NASDAQ:NTES) cross border e-commerce unit for $2 billion.The acquisition can be a potential stock upside catalyst. Koala is focused on imported goods and the market for foreign luxury brands is expanding in China.I must mention here that "Tmall Luxury Pavilion" has already been attracting premium global brands. As an example, Michael Kors announced that it will open its digital flagship store on Tmall. Therefore, Koala will serve as a growth catalyst for luxury and imported brands offering to consumers.According to Bain & Capital, China's luxury good market posted growth of 20% for 2016-17 and 2017-18. Further, the report suggests that overseas purchases will continue to surge in the coming years. As I mentioned earlier, a possibly stronger Yuan will also contribute to demand for overseas goods. The acquisition would therefore make sense for Alibaba Group.It is worth noting that JD.com (NASDAQ:JD) has also been focusing on exclusive agreements with international brands. In the second quarter, Prada Group, the Italian fashion house, agreed to open a first-party flagship stores on JD.com. There have been several other flagship store agreements with premium brands.The key is, the retail boom will drive interest from national and international brands. From the perspective of Alibaba, this will translate into higher revenue, EBITDA margin and free cash flows. BABA Has Strong Growth, Attractive ValuationsAlibaba stock will continue to report robust growth with sustained upside in core commerce and with financial muscles for inorganic growth. My view is underscored by the point that analyst estimates suggest average 5-year earnings growth at 22.1%.Considering the potential growth trajectory, BABA stock is trading at attractive valuations. The stock currently trades at a forward PE of 20.6 as compared to a forward PE of 28.45 for JD.com.I therefore expect the stock to trend higher in the coming quarters. Final Words on BABA StockAlibaba is an attractive stock for the long-term considering the growth in China's retail sector. Besides having a leading market share, Alibaba has the financial flexibility to pursue organic and inorganic growth.Core commerce will continue to drive revenue and EBITDA. Further, investment in cloud computing is a potential long-term value creator.Alibaba will also create shareholder value through share repurchase and potential dividends. Robust free cash flows provide the company with the required liquidity.As of this writing, Faisal Humayun did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post Alibaba Stock Well-Positioned to Benefit From Chinaas Consumption Boom appeared first on InvestorPlace.
In general, equity markets represent investor confidence. Since late July, most tech stocks have been declining amidst the bearish sentiment in the global and United States markets. It is no secret that the Chinese economy is beginning to feel the effects of the ongoing trade war. Other global powers, such as Japan, the United Kingdom and the European Union, led by Germany and France, are also showing signs of a slowdown. And earlier in the week, Argentina spooked the Latin American markets when its currency and equity markets lost a third of their value overnight.In other words, unless we have a swift resolution on the trade war front, spending by the U.S. consumer may not be enough to improve economic prospects globally.Therefore, investors are wondering what may be next for many of the tech stocks in their portfolios. Today, I'd like to discuss three tech stocks to avoid in the second half of August and possibly in September, too. These stocks are Baidu (NASDAQ:BIDU), Roku (NASDAQ:ROKU) and Tesla (NASDAQ:TSLA).InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Cyclical Stocks to Buy (or Sell) Now Investors may consider waiting on the sidelines if they do not currently have any positions open in these tech stocks. If they already own shares, they may either consider taking some money off the table during this market bounce or hedging their positions. As for hedging strategies, covered calls or put spreads with Sep 20 expiry could be appropriate as straight put purchases are likely to be expensive due to heightened volatility.With all of that in mind, let's dive a little deeper into each of these stocks. Stocks to Sell: Baidu (BIDU)Source: testing / Shutterstock.com Notable Risks: Valuation, questions about growth, trade wars and broader tech market weaknessPossible Price Range: $85-$105During the past year, the BIDU stock price is down 55%. On Sep. 21, 2018, the shares saw a 52-week high of $234.88. Now, Baidu stock is hovering around $95. Clearly, the bears have taken control of the tape.What is the main reason for the deterioration of Baidu's market cap? Investors fear that the company's growth narrative does not hold any more.BIDU has two sources of revenue: * Internet advertising business (which is at the core); and * Income from majority ownership in iQiyi (NASDAQ:IQ)The tech market in China has grown exponentially in the last decade. And Baidu stock has been able to ride that wave. Baidu has over 70% of the Chinese online search market share. Until about a year ago, this leadership has meant growing advertising revenues and solid margins.However, that is not the case anymore. Competitors like Alibaba (NYSE:BABA) and Tencent (OTCMKTS:TCEHY) have been pressuring its business model and ad revenues. Many Chinese consumers are using apps that bypass browsers and thus Baidu's search engine. In other words, BIDU stock's desktop search business is being disrupted or even displaced.Wall Street is not sure if management knows how to go after the challenge to Baidu's core business. The company has increased spending to attract more advertisers, which in turn has affected margins. In other words, the company spends a lot of cash to make some money.Furthermore, as the Chinese economy slows down, all these companies chase the same advertisers, who have been scaling down ad budgets.The second factor adversely affecting Baidu's top-line growth comes from its ownership of iQiyi, the so-called Netflix (NASDAQ:NFLX) of China. Baidu still owns roughly two-thirds of iQiyi, so IQ's results and its growth are reflected in Baidu's consolidated numbers. And iQiyi stock is not making any money at this point either.Management at iQiyi has underlined that as the company further invests in technology and builds content, the cost of revenue would be high -- therefore the company will not be profitable any time soon.And when you add the uncertainty around trade wars, it may just not be fashionable to buy BIDU shares in 2019. Overall, the bull thesis supporting BIDU stock is falling apart. It would be important to analyze the next earnings report expected in November to see if Baidu stock has a better investment proposition for long-term investors.From a time and price analysis perspective, I'd expect BIDU stock to reach a 52-week low around Sept. 21. Until then, I'd not get too bullish on Baidu shares. Roku (ROKU)Source: JHVEPhoto / Shutterstock.com Notable Risks: Profit-taking, rich valuation and broader tech market weaknessPossible Price Range: $135-$155ROKU stock has been on a tear this year. Year-to-date, Roku shares are up 135%. However, it might now be time for investors to become cautious.With a market cap of $11.7 billion, Roku stock is the largest over-the-top streaming content provider in the U.S. On Sept. 17, 2018, ROKU stock hit a 52-week high at $198.23.U.S. consumers are fast moving from traditional pay-TV services to streaming delivery services. Advertisers are following those viewers. That's reason number one why, longer-term, I would not bet against Roku shares whose revenue increasingly comes from advertising. However, there is likely to be some further profit-taking in ROKU stock in the next few weeks.Roku has been a pioneer in streaming video gadgets. The company's revenue can be divided into two segments: "Player" which represents sales of its digital media boxes and "Platform" which includes advertising sales, licensing and other non-hardware revenue sources.At present, Roku and Hulu, the video streaming service that is majority-owned by Disney (NYSE:DIS), are the market leaders in over-the-top advertising. OTT ads are shown on a TV screen through a smart TV or streaming device.Roku is a growth stock, but it's also a speculative one. Long-term ROKU bulls happily highlight many of Roku's competitive advantages, starting with the platform's first-mover advantage in OTT advertising, share of smart TVs sold in the U.S. and projected annual growth of over 30% in the rapidly expanding over-the-top streaming market.On the other side of the coin are the nervous investors and short-sellers who are looking for any excuse to short ROKU stock. If Roku cannot keep up with the aggressive growth assumptions, then shareholders may become more concerned with low profits as well as its margins and the stock price could easily suffer. In other words, could ROKU stock price be getting ahead of itself? * 8 Dividend Aristocrat Stocks to Buy Now No Matter What Therefore, I'd encourage retail investors to exercise caution with Roku stock until the next earnings report, expected in October. Tesla (TSLA)Source: Sheila Fitzgerald / Shutterstock.com Notable Risks: Fundamentals, profit-taking, trade wars and broader tech market weaknessPossible Price Range: $180-$230When Tesla released worse-than-expected second-quarter 2019 earnings on July 24, many investors possibly ended up with more questions than answers on what to expect from Tesla stock for the rest of the year.Before reporting earnings, TSLA stock closed at $264.88. The next morning it opened at $234.50. Now Tesla stock price is hovering around the $220-$225 range.Investors usually can get a sense of any current and future problems by looking at operational and market performance as well as at basic financial metrics and cash flow. In Tesla's case, we may have a combination of signs of difficulty.The past year has seen the demand for electric vehicles decline in the U.S. And Tesla's Model 3 sales have not been at the levels expected.Tesla's Q2 results showed that the gross margin of its automotive segment is declining. Last quarter, it was 20.2%. In Q4 and Q3 of 2018, the metric was 24.3% and 25.8%, respectively.The main reason behind the decline of the company's gross margin is that Tesla's sales mix is increasingly shifting from higher-priced S and X models to the Model 3. Model 3, which is priced at $35,000 is an entry-level car that carries lower margins.As we discuss Tesla's problems, we have to mention that the auto sector is susceptible to the trade-war risk. As the demand in the U.S. declines, Tesla needs to achieve increased sales numbers from overseas, namely China, the largest electric vehicle market in the world.In late 2017, Tesla and the Chinese government agreed that the company would manufacture cars in China, and build and own a factory in Shanghai.TSLA is continuing to build its manufacturing plant in Shanghai. However, the details as to when actual production will begin at the plant is sketchy. Tesla is yet to release definite dates and production goals for the plant.At this point, TSLA stock has had several months of poor performance, both in terms of metrics and the stock price. Therefore, before committing any capital into the shares, I'd like to see the next earnings statement, expected in late October. By then, we might even have an earnings warning statement, which would send the stock even further south.At this point, Tesla bears have the upper hand and I'd consider investing in TSLA stock as a speculative bet.As of this writing, Tezcan Gecgil did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post 3 Tech Stocks to Avoid (or Sell) for Now appeared first on InvestorPlace.
Chinese internet search giant Baidu (NASDAQ:BIDU) is set to report second-quarter numbers after today's bell and I'm not too optimistic on BIDU stock ahead of the print.Source: StreetVJ / Shutterstock.com From a high-level perspective, it does appear that China's economy is rebounding. Economic data coming out of China has meaningfully improved over the past several months. Meanwhile, Chinese tech heavyweights Alibaba (NYSE:BABA), JD.Com (NASDAQ:JD) and Tencent (OTCMKTS:TCEHY) all recently reported strong quarterly numbers.But two of those three companies -- JD and Tencent -- said on their earnings calls that the ad market in China remains incredibly challenging. Tencent's ad business actually slowed this quarter. Baidu gets most of its revenue from its ad business. As such, with the broad read from recent reports being that China's ad business remains under tremendous pressure, the chance of Baidu reporting favorable numbers is not great.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThat's why I'm avoiding BIDU stock this earnings season. This stock is in a big secular decline because its numbers have consistently disappointed investors. Those numbers will likely continue to disappoint for the foreseeable future. Thus, while Baidu stock is pretty cheap, it's still too risky to try and catch this falling knife.The big implication here? Stay until away until there's reason to come back. Baidu's Numbers Likely Won't Be GoodThe big reason to avoid BIDU stock ahead of the Q2 print is because it looks like the numbers won't be that good. * 7 Safe Dividend Stocks for Investors to Buy Right Now Baidu has a lot of moving parts. But, at its core, this is the Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) of China. As such, Baidu is an advertising business. Specifically, this is a search advertising business. But, the whole digital ad market in China -- and specifically the search ad market -- is dramatically slowing, mostly because it's oversaturated and because the entire economy is slowing.In these slowing markets, Baidu is also losing share. This share erosion has two drivers. One, alternative ad formats are more compelling (like in-feed and social). Two, Baidu is staring at elevated competition in the search game.Net net, Baidu is losing share in a slowing market. This has caused core revenue growth rates to slow from 50%-plus a few years ago, to under 20% last quarter. At the same time, Baidu is aggressively investing in alternative growth arenas to re-stimulate growth. This big spend is killing margins. Slowing growth plus falling margins equals tumbling profits. That's exactly what's happening. BIDU stock's earnings per share is expected to be cut in half this year.It does not appear that the Q2 print will have anything in it that will change the course of this downbeat narrative. JD said in its recent conference call that the China ad market remains under great pressure. Tencent had a similar tone in its conference call, citing a challenging digital ad macro environment as the reason why their digital ad business slowed from 25% growth in Q1 to 16% growth in Q2.If JD and Tencent -- two companies whose ad businesses have been relatively strong -- struggled this past quarter on the ad front, then it's pretty likely that Baidu -- a company whose ad business has been in free-fall -- struggled too. Continued bad numbers from Baidu won't be enough to shake BIDU stock out of its multi-quarter downtrend. Baidu Stock Is Cheap -- But the Worst May Not Be OverZooming out, Baidu stock is unequivocally very cheap in the big picture.Revenue growth trends are falling flat this year. But they will probably improve over the next several years as Baidu adapts its ad business to be more relevant in China's double-digit growth ad market. Thus, Baidu should be able to start stabilizing market share over the next several years, which should lead to renewed and consistent double-digit revenue growth. Revenue growth consistency will allow the company to pull back on big growth-related investments, so margins should improve too.Realistically, Baidu could grow revenues at a roughly 10% rate from 2019 into 2025, while adjusted operating margins could bounce back to 20% (where they were in 2018). Those assumptions make $15 in EPS seem doable for Baidu by 2025. Based on a market average 16-forward multiple, that implies a 2024 price target for BIDU stock of $240. Discounted back by 10% per year, that equates to a 2019 price target of roughly $150.That's more than 50% higher than where Baidu stock trades today. Thus, BIDU stock is undervalued.But, it will remain undervalued until investors have reason to believe that Baidu will stabilize its share in China's slowing digital ad market. That won't happen this quarter. As such, for the foreseeable future, BIDU stock will likely remain undervalued. Bottom Line on BIDU StockAt some point, Baidu stock will stage a huge, rip-your-face-off rally. But not today. That rally won't happen until Baidu proves that it can stabilize share in the slowing China digital ad market, and thereby, stabilize margins and profits. Baidu won't prove that this quarter. Until it does, it's best to stay away from this falling knife.As of this writing, Luke Lango was long BABA, JD and GOOG. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post Baidu Stock Looks Risky Ahead of Earnings appeared first on InvestorPlace.
Baidu's earnings this evening could be pivotal for the firm as investors evaluate whether Baidu can revitalize grow and remain profitable.
U.S. stock futures are adding to Friday's sharp rebound. The recovery is likely being aided by the action in the bond market. Bond prices are weakening, and yields are starting to snap-back from their record low levels.Source: Shutterstock Ahead of the bell, futures on the Dow Jones Industrial Average are up 0.1.09% and S&P 500 futures are higher by 1.06%. Nasdaq-100 futures have added 1.33%.In the options pits, call volume led the way ahead of the weekend while overall volume racked up to above-average levels. Approximately 21.2 million calls and 19.2 million puts changed hands on the session.InvestorPlace - Stock Market News, Stock Advice & Trading TipsWith buyers returning to the field, the CBOE single-session equity put/call volume ratio plunged back down to 0.67. Friday's market recovery and this morning's strong follow-through proves once again that spikes seen in this metric like last week are reliable signals that fear is overdone and a bottom is nigh. The 10-day moving average dropped to 0.76.Options activity was hopping in companies reporting quarterly reports. Applied Materials (NASDAQ:AMAT), Alibaba (NYSE:BABA) and Nvidia (NYSE:NVDA) all saw heavy volumes amid volatile trading sessions.Let's take a closer look: Applied Materials (AMAT)Applied Materials shares saw a sharp uptick in volatility Friday after the release of third-quarter earnings. Early morning weakness took AMAT stock down as much as 5.4% before buyers emerged and pushed it back to finish down 1.1%. * 10 Best High-Growth Stocks to Buy for Young Investors The semiconductor company posted earnings per share of 74 cents on sales of $3.56 billion. Although both metrics marked a double-digit, year-over-year decline (29% and 14%, respectively), they still beat the Street's estimates.AMAT bulls should be pleased with Friday's price performance for two reasons. First, the stock rallied back to close above the 50-day moving average, which kept its intermediate uptrend intact. Second, it also closed above its prior pivot low after trading below it throughout the morning. Both successes suggest buyers aren't ready to relinquish control, and the path of least resistance remains higher.On the options trading front, puts outpaced calls by over two to one. Total activity swelled to 299% of the average daily volume, with 92,107 contracts traded; 67% of the trading came from put options alone.Premiums were baking in a gap of $2.54 on earnings so with the stock closing down only 53 cents, volatility sellers came out victors. Implied volatility dropped to 19%, and premiums are only pricing in daily moves of 99 cents or 2.1%. Alibaba (BABA)Alibaba stock is on the mend after reporting earnings numbers worth celebrating last week. For the fiscal first quarter, China's e-commerce juggernaut posted revenues of $16.74 billion, marking a 42% increase versus the year-ago quarter. The robust top-line growth helped drive adjusted income per share to $1.83.Wall Street analysts were forecasting earnings of $1.46 per share on revenue of $15.8 billion.A strong two-day rally carried BABA stock into the weekend and shares are up another 1.8% premarket. Its price trend has been a hot mess for months, but it's at least now back above all major moving averages. Overhead resistance looms close at $180, so that's the ceiling that needs to be smashed for the upside momentum to really fire up.On the options trading front, traders came after calls with a vengeance. Activity swelled to 192% of the average daily volume, with 346,809 total contracts traded. Calls claimed 76% of the session's sum.With earnings now in the rearview mirror, implied volatility sank to 31% placing it at the 19th percentile of its one-year range. Premiums are pricing in daily moves of $3.46 or 2%. Nvidia (NVDA)Nvidia shares have spent much of 2019 mired in a trading range, but improving earnings may finally give bulls much-needed firepower. The graphics-chip giant released second-quarter earnings for fiscal 2020 after the bell Thursday and investors were pleased with the performance.Although the year-over-year numbers saw double-digit percentage declines, they surpassed the Street's estimates. For the quarter, revenue came in at $2.58 billion, and EPS arrived at $1.24. * 15 Growth Stocks to Buy for the Long Haul The beat was enough to push NVDA stock up by 7.3%. Unfortunately, the price trend remains as uninspiring as ever. NVDA remains in the middle of its range and needs to break through $180 resistance before a bona fide uptrend takes root. Friday's rally was a big first step, but many more are required before it can reclaim its former uptrend's glory.On the options trading front, traders favored calls throughout the session. Activity rose to 246% of the average daily volume, with 95,629 total contracts traded. Calls added 64% to the day's take.Implied volatility plunged to 38% or the 17th percentile of its one-year range. Premiums are now pricing in daily moves of $3.79 or 2.4%.As of this writing, Tyler Craig didn't hold a position in any of the aforementioned securities. Check out his recently released Bear Market Survival Guide to learn how to defend your portfolio against market volatility. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post Monday's Vital Data: Applied Materials, Alibaba and Nvidia appeared first on InvestorPlace.
Reportedly, Alibaba Group Holding (BABA) has agreed to acquire an e-commerce company, Kaola Unit, from NetEase Inc. for approximately $2 billion.
(Bloomberg) -- Hong Kong demonstrators will need to look beyond mainland China for supplies of protest gear that’s defined the look of the movement.Queries on Chinese e-commerce portals such as Alibaba Group Holding Ltd.’s Taobao for umbrellas, masks and helmets would return the searches as “item not found” for buyers based in Hong Kong, while those on the mainland had positive results. Hong Kong logistics companies said a list of “sensitive items” which include black T-shirts, banners, laser pens and facial masks will be detained at customs.Protests in Hong Kong have dragged on since early June, with the government warning of the damage to the economy and the city’s reputation. Police have used tear gas and rubber bullets on demonstrators who linger after peaceful rallies ended, and the confrontations have turned increasingly violent in recent weeks.In such fights, protesters wear gas masks and helmets, and police have said some target strong laser beams at them. After entering search queries, e-commerce site JD.com showed helmets and laser pens are “out of storage for Hong Kong and Macau.” A representative of Hong Kong’s customs says it didn’t receive any directive to control the import of protest-related items, and it doesn’t know if there are any restrictions from mainland customs. Outside of business hours, a call to China’s customs went unanswered, while representatives for JD and Alibaba, which owns Taobao, didn’t immediately reply to requests for comment.According to a notice on the website of Hong Kong logistics company Dailybuyco.com, customs has strengthened controls over imports and exports. The current list of “sensitive items” also includes towels, umbrellas, glow sticks, flashlights and helmets. The list, as defined by the customs, is constantly changing, the website said, without specifying if it was Hong Kong or China authorities.Another delivery company Taopai.hk posted a similar notice earlier this month, saying that customs and the Hong Kong government are posting restrictions over imported goods, including yellow umbrellas, yellow helmets, iron pipes and knives. No “goods for riot” can be transported in freight, the post said.To contact the reporter on this story: Jinshan Hong in Hong Kong at firstname.lastname@example.orgTo contact the editors responsible for this story: Shamim Adam at email@example.com, Fion LiFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- A top long-only equity hedge fund is betting big on Internet dating.Helsinki-based HCP Focus, which has a slim portfolio of only 12 “high-conviction” stocks, has 16% of its funds invested in Tinder-operator Match Group Inc. The owner of subscription-based online dating websites and applications has risen 93% so far this year, with a surge in new Tinder subscribers boosting second-quarter revenue and fueling a record gain on August 7. HCP entered the stock at the beginning of 2017.“If you’re a heterosexual single guy, you don’t really care about the technical details,” Ernst Gronblom, portfolio manager at Helsinki Capital Partners, said by phone on Thursday. “When a dating platform has reached critical mass, it’s very, very hard to dislodge it. If a competing platform tries to enter the market, it’s very hard to convince people to create accounts on several dating platforms.”HCP Focus manages about 70 million euros ($78 million) and was the top long-only equity fund over the three years through the first quarter, according to BarclayHedge. It returned an average 22% a year in the past five years through July. Match is its biggest holding, followed by Amazon.com Inc., which has been one of the main holdings since the start of the fund.“It’s not overvalued,” he said. “But I don’t see an explosive upside in it anymore because it’s so huge. It has the potential to give a reasonably good return for quite some time.”Gronblom focuses on companies with network effects that can create “natural monopolies”. He also holds PayPal Holdings Inc., Alibaba Group Holding Ltd and Facebook Inc., which has the strongest network effects “of any big company on the planet,” he said.Zeroing in on just 12 stocks is the “sweet spot” for Gronblom, giving enough diversification to keep volatility in check yet concentrated enough to give the full benefits of stock-picking, he said. That’s a strategy that has outperformed in recent years, but it faces risks in the short term from a global bear market.“Most of my portfolio companies are highly valued, at least according to traditional metrics,” he said. “If there’s a panic in the market these companies will typically suffer more severe losses than regular companies.“To contact the reporter on this story: Jonas Cho Walsgard in Oslo at firstname.lastname@example.orgTo contact the editors responsible for this story: Jonas Bergman at email@example.com, Stephen TreloarFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Hong Kong's political unrest is posing a dilemma for Alibaba Group Holding Ltd on the timing of its planned $15 billion listing in the city, with sources saying China's biggest e-commerce company is now considering several timetables. New York-listed Alibaba was most likely to launch the offer - potentially the world's biggest of the year - as early as the third quarter, sources have said, and late August, after its first-quarter earnings, was widely viewed as the most likely window. In preparation for the giant offer, bankers advising other large listings in Hong Kong have been careful to avoid planning their launches around that period, fearing that a clash of timing would crowd out their offerings.
The stock market fell in volatile fashion amid China trade news and the first inverted yield curve since 2007. Walmart, Cisco, Macy's, GE were big movers.
Alibaba Group stock edged up Friday as the China e-commerce giant received several price target hikes following its quarterly earnings report that beat views on the top and bottom lines.
The Chinese online giant delivered another strong quarter despite the softening economy in China, and Wall Street is loving it. All but one of the 52 analysts polled by FactSet have a Buy or equivalent rating.
The Chinese tech giant is still generating double-digit sales and earnings growth, but two of its main engines are losing steam.
The league and team announced Friday that Russian billionaire Mikhail Prokhorov will sell the remaining 51% interest in the team to Tsai, who purchased 49% of the Nets in 2018. Tsai will also buy the Barclays Center in Brooklyn, where the Nets play.
Alibaba Group Holding's (BABA) fiscal first-quarter 2020 earnings are driven by steady improvement in core commerce and cloud businesses, along with strong growth in metrics.