Guru Ron Baron (Trades, Portfolio) boosted his stake in Alibaba (BABA, Financial) during the second quarter for an average price of $78.27 per share.
Since the addition, Alibaba has risen an estimated 22% in price. Baron now owns 816,738 shares in the company.
Headquartered in Hangzhou, China, Alibaba is a Chinese ecommerce company that provides consumer-to-consumer, business-to-business sales services via web portals. It is a shopping search engine, and it also provides electronic payment services.
Alibaba began its operations in 1999 after Jack Ma leveraged his initial capital of $60,000, creating a company that currently has hundreds of millions of users worldwide with an enterprise value that exceeds $200 billion. Ma has been able to overcome tremendous adversity in the midst of founding one of the world's largest ecommerce sites.
Alibaba is currently expanding its operations and recently purchased China Vision Media in 2014. It then changed its name to Alibaba Pictures. The company recently released the movie "Star Trek Beyond" and has plans to release more films.
Alibaba has a market cap of $202.57 billion, an enterprise value of $205.69 billion, a price-earnings (P/E) ratio of 32.57 and a price-book (P/B) ratio of 6.99.
According to GuruFocus, Alibaba has a 3-star predictability rating, a 7 of 10 financial rating and a Beneish-M score of -3.08 indicating the company is not a manipulator of its financial statements. Alibaba also has a 9 of 10 profitability and growth rating with an operating margin of 29%, an ROE of 23.33%, an ROA of 13.77% and its EBITDA (three-year) growth is 138.20%, ranking above 99% of the 661 companies in the global specialty retail industry.
Below is a Peter Lynch chart that shows Alibaba is currently trading above its intrinsic value.
Baron is a New Jersey native who attended Bucknell University in Pennsylvania where he received his B.A. in chemistry in 1965. Upon graduation, Baron landed his first job at the U.S. Patent Office as a patent examiner.
Baron changed career paths, accepting a job as a security analyst. Over the course of the next several years, Baron worked at various brokerage firms. On March 16, 1982 he founded Baron Capital Inc., an investment firm that focuses on long-term growth investing while taking an approach similar to Warren Buffett (Trades, Portfolio), treating securities as if they were the owners of the business.
Cheers to your investment success.
Disclosure: Author does not own any shares of this company.
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