Sometimes, all it takes is a little extra faith from insiders to get the ball rolling on huge gains for a stock. After all, insiders generally don’t buy a stock unless they expect to make money doing so. In the end, that’s the main reason anyone buys a stock. And for Chinese stock Alibaba (NYSE:BABA), that was what it was all about. Alibaba’s co-founder, Jack Ma, stepped in and bought up a massive quantity of Alibaba stock.
Between himself and chairman Joe Tsai, the two bought just over $200 million worth of shares, with Ma picking up $50 million and Tsai picking up about three times that much at $151 million. Meanwhile, Alibaba itself engaged in a hefty share buyback worth around $9.5 billion through the entirety of 2023. While things haven’t always gone well for Alibaba—its share price recently fell back to below the IPO level—it’s still the best chance China has right now to produce a trillion-dollar company at last report.
A Bottom for Alibaba?
The Recent massive purchases suggest that the bottom may be in for Alibaba. In fact, one analyst noted that the arguments for buying in are now stronger than those for selling off. The launch of a cash dividend certainly didn’t hurt matters, and with Alibaba keeping up its buyback program as well, that’s a lot of inducement to the outside shareholder. In fact, some reports even suggest a major upside price reversal could be in the making, though only time will tell if that pans out.
Is Alibaba a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on BABA stock based on 18 Buys and two Holds assigned in the past three months, as indicated by the graphic below. After a 37.31% loss in its share price over the past year, the average BABA price target of $118.60 per share implies 60.38% upside potential.
