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ClearBridge Investments: “We Continue to View Alibaba (BABA) as a Durable Business”

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ClearBridge Investments, an investment management firm, published its “Large Cap Growth Strategy” third quarter 2021 investor letter – a copy of which can be downloaded here. The ClearBridge Large Cap Growth Strategy underperformed its Russell 1000 Growth Index benchmark during the third quarter. On an absolute basis, the Strategy had gains across four of the eight sectors in which it was invested (out of 11 sectors total). The leading contributors to performance were in the IT and health care sectors, while the consumer discretionary and industrials sectors were detractors. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.

ClearBridge Large Cap Growth Strategy, in its Q3 2021 investor letter, mentioned Alibaba Group Holding Limited (NYSE: BABA) and discussed its stance on the firm. Alibaba Group Holding Limited is a Hangzhou, China-based e-commerce company with a $351.9 billion market capitalization. BABA delivered a 9.28% return since the beginning of the year, while its 12-month returns are down by -45.04%. The stock closed at $129.81 per share on January 07, 2022.

Here is what ClearBridge Large Cap Growth Strategy has to say about Alibaba Group Holding Limited in its Q3 2021 investor letter:

“Large cap companies continue to serve an ever more global marketplace, leading us to research growth opportunities beyond the U.S. We first purchased Alibaba, China’s leading e-commerce and digital payments platform, in 2018 to gain greater exposure to the emerging Chinese consumer market. Recently, Alibaba has borne the brunt of Beijing’s regulatory crackdown on technology companies that began in late 2020 with the postponement of the Ant Financial IPO. While the stock was the primary detractor from performance in the third quarter, with the Chinese government’s antitrust investigation of Alibaba now closed and Ant Financial being revamped, we believe Alibaba is moving past major regulatory risks. The stock now trades at a substantial valuation discount relative to its growth potential. We continue to view Alibaba as a durable business with the potential for sustained revenue and profit growth and the scale to weather periods of disruption due to its size, balance sheet and importance to the Chinese economy.”

Alibaba Group Holding Ltd (NYSE:BABA), Logo, big sign, People taking photos, offering, ipo, group, stock

Christopher Penler /

Based on our calculations, Alibaba Group Holding Limited (NYSE: BABA) ranks 13th in our list of the 30 Most Popular Stocks Among Hedge Funds. BABA was in 115 hedge fund portfolios at the end of the third quarter of 2021, compared to 146 funds in the previous quarter. Alibaba Group Holding Limited (NYSE: BABA) delivered a -19.63% return in the past 3 months.

In December 2021, we also shared another hedge fund’s views on BABA in another article. You can find more than 100 investor letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q3 page.

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