Time to Close your Eyes and Buy $BABA

Look, the headline close your eyes and buy Alibaba stock could have and has been written many times in the past couple of years. Yes, Alibaba was once a darling stock for investors as their revenue growth in 2018-2021 was 54%, 36%, 33% and 38%, respectively. The stock used to trade at 30x EPS or more! Investors even thought that number was undervaluing the business as Alibaba had many equity investments (like Tencent does) in companies such as Ant Financial. Today, the stock sits at 6-7x free cash flow per share. Sure Rob, but is the cash real and can the Chinese government suddenly take all that cash? Yes, the cash is real and highly unlikely the government suddenly ruins its standing in the global financial markets by privatizing public companies. In fact, BABA management is shareholder friendly! They bought back 156 million ADS for $12.5 billion in 2023 and have vowed to reduce the sharecount via buyback by 3% per year over the next 3 years. Equally, they now pay a $1 annual dividend and added a special dividend of 66 cents for 2024.