Over the year 2021, BABA has fallen -52.98% as an outcome of what amounts to political risk or in this case, interference from the CCP in respects to the substance underpinning BABA's business model — that translates to many aspects of the company's operating and financial dynamics being targeted, including the way it raises capital offshore [LINK].
Notwithstanding a quick review of BABA's quarterly financials reveals growth in revenues -32% [Seeking Alpha LINK] and profitability have slowed. On top of that, BABA faces supply chain problems and China its main demographic is looking a little recessionary. Then on the technology front, it faces competition.
Even after baking all this negativity into the stock price, one could consider BABA as looking rather cheap but its Technical Indicators paints a picture of an asset that has little mainstream investor interest above daily or weekly speculation.
Is BABA a good buy? ... It's high risk and long term Asset Investors (the buy to hold community) aren't showing the right kind of interest in it. If you want to put this asset in your portfolio, you may not want to be the first to do so — you know, no one wants to be first grabbing anything that has been flagged as discounted and cheap.
Cheap is not always valuable.
December 2021 Stock Price Action of BABA
If trading teaches you anything, it's important to note that Price, Cost and Value are not the same thing and just because something is cheap, doesn't mean to say it's interesting for a Value Investor.
Now there is value to be had in BABA but in the short term that comes from speculating on its stock price volatility across the price support floor the asset seems to have established — be aware, it's entirely possible that BABA hasn't found a bottom.
December 2021 BABA's Option Chain
High Gamma Option Traders can use calls & puts to capture small profits from daily swings in BABA's price, and a quick glance at the option chain shows there is money to be had in such a speculative trading strategy. However, while BABA is cheap, you shouldn't be cheap if you dip your toes in to speculate; select an option contract with enough delta sensitivity to make this exercise worthwhile — Risk Cost your activity in a way that serves the objective, not the value of the asset underpinning that objective.
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