Alibaba: A Contrarian Investment Opportunity in China's Market

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Investors are looking ahead to 2025, and Barron's top stocks list for the year includes Alibaba, a company that has faced recent controversy. Despite investor apprehension about China's market, analysts and institutional investors are increasingly bullish on Alibaba's prospects. The article highlights a potential buying opportunity in China's stock market, citing factors such as falling bond yields and a significant divergence between stock and bond yields.

It’s the end of the 2024 trading year. Now that investor attention – and capital – is headed to 2025, a few resources might be useful for figuring out the best ideas and trends to invest in in the coming months. One of these resources is Barron’s top stocks list for 2025, released every end of the year and followed by many for their accuracy on average at picking good companies to hold over the next 12 months. Today’s list included a name that has been the center of some controversy recently.

As part of overseas stocks in China, it is not a company that has inspired a lot of comfort among investors. However, that is exactly where a true value investor finds his or her best ideas: when nobody else is willing to do the homework because everyone else just seems to be too against the idea.Several analysts on Wall Street are also boosting their ratings and valuations for Alibaba stock, not to mention the various institutional investors surrounding the stock near its lows.China’s Economy Calls for Stock Buyers There is a major divergence in Asia’s bond market. On Tuesday, yields would make China’s economy the best risk-to-reward ratio in the region. Yields have fallen below Japan’s on a 30-year bond basis, meaning markets are now pricing in less risk and volatility in China than in Japan. offers a dividend yield of up to 2.5%, which is above the Chinese ten-year bond’s current yield of 1.7%. In any other market, when stocks offer a higher yield than the country’s ten-year bond, there is typically a buying spree. Well, there hasn’t been one in China for the most part, and that should tell investors that this is a fear-driven market where they can follow Warren Buffett’s advice and “Be greedy when others are fearful.” On the other hand, a few mega investors have been quietly building massive positions in Alibaba before it becomes too popula

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