Last week, Alibaba (BABA) announced they would kick off their “Super September” campaign today. Shares of the company immediately went up 1.6%. A week later, as I write this, they’re still up nearly 3%. So, what exactly is Alibaba, and how can investors outside of China profit from this Internet giant?
Founded in 1999, Alibaba is China’s answer to American retailer Amazon (AMZN).
Alibaba operates through six online shops and marketplaces. But that’s not all. They also provide marketing services, including a data management platform that allows participants to evaluate and select online advertising inventory using behavioral data, browsing behavior and shopping history.
In addition, much like their American counterparts, Alibaba offers cloud computing services. This—in addition to their Web hosting and domain name registration services, payment services and mobile Web browsers—is provided primarily for small businesses.
Needless to say, Alibaba is a mammoth online presence in the People’s Republic of China.
Today, Alibaba is launching their “Super September” promotions. This will function as a way to lower international trading barriers for small- and medium-sized buyers. During “Super September,” buyers will see some of the best deals in Home & Garden, Fashion, Consumer Electronics and Machinery. The event will also offer Trade Assurance, which provides cross-border trade protection to instill more trust between venders and buyers.
This promotion is even more good news for the company’s shareholders on top of last month’s stellar earnings report. In August, Alibaba reported strong growth across all its core businesses. Revenue jumped 56% year-over-year to RMB50.18 billion, or $7.4 billion. Annual active consumers rose to 466 million. Adjusted earnings per share came in at $1.19, which topped analysts’ estimates for $0.93 per share by 28%.
Looking ahead to this quarter, the analyst community is expecting earnings of $1.02 per share on $7.72 billion in sales, which represents 29.1% annual earnings growth and 50.3% annual sales growth. Analysts have also revised their earnings per share estimates $0.05 higher in the past week alone.
Add it all up, and it’s no wonder Alibaba remains a Strong Buy in my Portfolio Grader tool. If you want to find out even more about my favorite stocks, I urge you to stay tuned-in to this blog during the weeks and months to come.