Pardon my grammar…don’t lose interest.
<<The insurace broker I bought was initially mostly in P and C selling auto, home, and other personal lines. This business was growing at over 50% a year, sometimes 100%. The stock of this business was selling for less than net cash on hand, zero debt, and less than 10 times earnings.
Could you provide the name of the insurance?
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Interesting that Lualso has c60% of his portfolio in the US Brk, Alphabet and Facebook etc
Li Lu*
BABA has announced to split itself into 6 units, primarily as a way to “right size” itself so that they can escape Chinese governments gaze. In the meantime the last 5 year share price performance compared to our beloved AMZN. I think sum of the parts of BABA should be valuable more than what it is today. Of course, there is Chinese government discount, still…
Technically BABA is getting very interesting. Ant fine and splitting of BABA means it will not be so big to threaten party bosses and hopefully the regulatory overhang is removed.
This shows the stock is basing from 2022.
This 1 year chart shows how all the averages are converging in a tight range. If it breaks out a nice bull run is possible. Of course there is a split of the business, so the units may get re-rated and not sure whether there are going to be any hidden surprises there.
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Personally, I would not touch any Chinese stocks.
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I understand. I share the view, however, a technical breakout, recent Japanese interest rate move, and Chinese stimulus, there are catalysts. You can own a tactical position, if you don’t want individual name own the index KWEB
Here is 10 year view
here is the last 2 year view
it is showing signs of breaking out, if it breaks out you can see a quick move to $40. I believe we are having a bull market and bull markets thrive by sector rotation and stocks that were down participate to keep the rally going. I could be wrong, we don’t know the future, but I am planning on opening 2% position.
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Thanks… but after what the Chinese government did (sudden clamping down of its tech behemoths, educational sectors, etc), many investors have lost faith. It takes a decade to build trust and reputation but a day to destroy it.
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Here is Morgan Stanley’s thesis
We are encouraged by BABA’s latest restructuring progress, including step-up in share buyback pace, announcement of AliCloud spin-off plan, as well as IPOs of non-core businesses, echoing our view that significant value will be returned to shareholders. We project total cash available for distribution could reach US$235bn in the next 3 years, by combining current net cash of US$58bn, 3-year FCF of US$90bn, cloud spin-off proceeds of US$56bn, and (hypothetical) monetization of 30% equity stakes in non-core businesses totaling US$32bn. We continue to see deep value in BABA (9x F24 P/E) with multiple levers to sustain earnings growth.
Earnings per share was $0.45 in 2014 and is now $8.31. (ATH EPS was $10.36 Q3 2021).
An interesting long term story continues to develop here.
For those who are trying to reconcile CNY to USD, please note, 1 ADS equals to 8 underlying shares and the exchange rate is 8 yuan = 1.1 USD.
One problem with Chinese companies is that the govt. takes your money and you don’t own anything. End of Story.
Divi,
Are you trying to help us understand why it’s so cheap? I agree, this would be 10x if HQ was in Seattle.
Investing in Chinese stocks based on fundamentals is not advisable.