Stock Analysis & Ideas

2 Stocks to Beat the Market – 2/17/23

Story Highlights

Alibaba and Walt Disney stocks have a “Perfect 10” Smart Score on TipRanks. They may present a promising opportunity for investors with long-term investment horizons.

In such volatile financial markets, TipRanks provides investors with tools that can help them choose and compare different stocks. One such tool is the TipRanks Smart Score, which indicates whether a stock is likely to outperform the markets.

Using this unique tool, we’ve looked up two stocks that are currently displaying the “Perfect 10” score – Alibaba (NYSE:BABA) and Walt Disney (NYSE:DIS). In the past three months, both stocks have outperformed the 3.3% rally in the S&P 500 (SPX) and less than 1% in the Dow Jones Industrial Average (DJIA).

Let’s discuss these stocks in detail.

Alibaba Group Holding Ltd. 

Based in China, Alibaba is a provider of e-commerce and technology infrastructure services. A regulatory crackdown, delisting concerns, and the COVID-19 outbreak in China impacted the stock’s performance last year. Nevertheless, the company stands to benefit from strong domestic demand for its cloud business and focus on diversifying its non-internet business.

The recent 13F filings of several hedge funds show an increase in holdings of Alibaba stock, reflecting their confidence in the company’s future performance. Scion Asset Management’s Michael Burry and Appaloosa Management’s David Tepper have added 50,000 and 10,000 shares of the company, respectively.

Is BABA a Buy or Hold?

Alibaba has a Strong Buy consensus rating based on 16 unanimous Buy recommendations. Further, the average price target of $138.53 implies 34.4% upside potential.

Besides for analysts, hedge funds have maintained a positive outlook on BABA stock. Our data shows that hedge funds bought 2.2 million shares of the company in the fourth quarter. Bloggers and retail investors are bullish on the stock as well.

The Walt Disney Co. 

Walt Disney is a leading international entertainment and media enterprise. It produces and distributes television and motion picture content, operates theme parks, resorts, and cruise lines, and also offers streaming services.

The company recently announced an encouraging restructuring plan to boost profitability. It involves the reorganization of its business into three segments, with each unit’s leader having full operational control. Furthermore, the streaming business continues to remain a top priority for the company.

Just like BABA, the stake in DIS stock was also increased by some of the ace investors. Soros Fund Management’s CEO George Soros increased his stakes in Disney to 189,600 shares, while Trian Fund Management’s Nelson Peltz started a new position in the stock.

What is the Price Target for DIS Stock?

Turning to Wall Street, DIS stock has a Strong Buy consensus rating based on 19 Buys and three Holds. The average price target of $129.15 implies an upside potential of 22.04%.

The stock also has a positive signal from hedge funds. Our data shows that hedge funds bought about 8.2 million shares of the company in the last quarter. Bloggers are bullish on the stock as well.

Ending Thoughts

In a nutshell, DIS and BABA are well-established names in their respective industries. Both stocks have the maximum Smart Score on TipRanks, implying they are more likely to beat the broader market averages.

Stay abreast of the best that TipRanks’ Smart Score has to offer.  


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