How to buy Alibaba shares

Alibaba Group Holding Limited (BABA) is a leading internet retail business with stocks listed in the US. It opened the day at 267.5 after a previous close of US$251.65. During the day the price has varied from a low of USD262.7 to a high of USD269. The latest price was USD265.49 (25 minute delay). Alibaba is listed on the NYSE. All prices are listed in US Dollars.

How to buy shares in Alibaba

1. Compare share trading platforms. To buy shares in a US company from Australia you'll need to find a trading platform that offers access to US stock markets. If you're just starting out, look for a platform with low brokerage and foreign exchange fees.
2. Open and fund your brokerage account. Complete an application with your personal and financial details, like your ID and tax file number. Fund your account with a bank transfer, credit card or debit card.
3. Search for Alibaba. Find the share by name or ticker symbol: BABA. Research its history to confirm it's a solid investment against your financial goals.
4. Purchase now or later. Buy today with a market order or use a limit order to delay your purchase until Alibaba reaches your desired price. To spread out your risk, look into dollar-cost averaging, which smooths out buying at consistent intervals and amounts.
5. Decide on how many to buy. At last close price of US$306.28, weigh your budget against a diversified portfolio that can minimise risk through the market's ups and downs. You may be able to buy a fractional share of Alibaba, depending on your broker.
6. Check in on your investment. Congratulations, you own a part of Alibaba. Optimise your portfolio by tracking how your stock — and even the business — performs with an eye on the long term. You may be eligible for dividends and shareholder voting rights on directors and management that can affect your stock.

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Is it a good time to buy Alibaba stock?

The technical analysis gauge below displays real-time ratings for the timeframes you select. This is not a recommendation, however. It represents a technical analysis based on the most popular technical indicators: Moving Averages, Oscillators and Pivots. Finder might not concur and takes no responsibility.

Is Alibaba under- or over-valued?

Valuing Alibaba stock is incredibly difficult, and any metric has to be viewed as part of a bigger picture of Alibaba's overall performance. However, analysts commonly use some key metrics to help gauge the value of a stock.

Alibaba's P/E ratio

Alibaba's current share price divided by its per-share earnings (EPS) over a 12-month period gives a "trailing price/earnings ratio" of roughly 26x. In other words, Alibaba shares trade at around 26x recent earnings.

That's comparable to, say, the trailing 12-month P/E ratio for the NASDAQ 100 at the end of 2019 (27.29).

Alibaba's PEG ratio

Alibaba's "price/earnings-to-growth ratio" can be calculated by dividing its P/E ratio by its growth – to give 0.897. A low ratio can be interpreted as meaning the shares offer better value, while a higher ratio can be interpreted as meaning the shares offer worse value.

The PEG ratio provides a broader view than just the P/E ratio, as it gives more insight into Alibaba's future profitability. By accounting for growth, it could also help you if you're comparing the share prices of multiple high-growth companies.

Shorting Alibaba shares

There are currently 37.2 million Alibaba shares held short by investors – that's known as Alibaba's "short interest". This figure is 13.6% down from 43.0 million last month.

There are a few different ways that this level of interest in shorting Alibaba shares can be evaluated.

Alibaba's "short interest ratio" (SIR)

Alibaba's "short interest ratio" (SIR) is the quantity of Alibaba shares currently shorted divided by the average quantity of Alibaba shares traded daily (recently around 26.4 million). Alibaba's SIR currently stands at 1.41. In other words for every 100,000 Alibaba shares traded daily on the market, roughly 1410 shares are currently held short.

However Alibaba's short interest can also be evaluated against the total number of Alibaba shares, or, against the total number of tradable Alibaba shares (the shares that aren't held by "insiders" or major long-term shareholders – also known as the "float"). In this case Alibaba's short interest could be expressed as 0.01% of the outstanding shares (for every 100,000 Alibaba shares in existence, roughly 10 shares are currently held short) or 0% of the tradable shares (for every 100,000 tradable Alibaba shares, roughly 0 shares are currently held short).

Such a low SIR usually points to an optimistic outlook for the share price, with fewer people currently willing to bet against Alibaba.

Find out more about how you can short Alibaba stock.

Alibaba's environmental, social and governance track record

Environmental, social and governance (known as ESG) criteria are a set of three factors used to measure the sustainability and social impact of companies like Alibaba.

When it comes to ESG scores, lower is better, and lower scores are generally associated with lower risk for would-be investors.

Alibaba's total ESG risk score

Total ESG risk: 28.21

Socially conscious investors use ESG scores to screen how an investment aligns with their worldview, and Alibaba's overall score of 28.21 (as at 01/01/2019) is pretty good – landing it in it in the 37th percentile of companies rated in the same sector.

ESG scores are increasingly used to estimate the level of risk a company like Alibaba is exposed to within the areas of "environmental" (carbon footprint, resource use etc.), "social" (health and safety, human rights etc.), and "governance" (anti-corruption, tax transparency etc.).

Alibaba's environmental score

Environmental score: 4.34/100

Alibaba's environmental score of 4.34 puts it squarely in the 4th percentile of companies rated in the same sector. This could suggest that Alibaba is a leader in its sector terms of its environmental impact, and exposed to a lower level of risk.

Alibaba's social score

Social score: 15.2/100

Alibaba's social score of 15.2 puts it squarely in the 4th percentile of companies rated in the same sector. This could suggest that Alibaba is a leader in its sector when it comes to taking good care of its workforce and the communities it impacts.

Alibaba's governance score

Governance score: 10.67/100

Alibaba's governance score puts it squarely in the 4th percentile of companies rated in the same sector. That could suggest that Alibaba is a leader in its sector when it comes to responsible management and strategy, and exposed to a lower level of risk.

Alibaba's controversy score

Controversy score: 2/5

ESG scores also evaluate any incidences of controversy that a company has been involved in. Alibaba scored a 2 out of 5 for controversy – the second-highest score possible, reflecting that Alibaba has, for the most part, managed to keep its nose clean.

Alibaba share dividends

We're not expecting Alibaba to pay a dividend over the next 12 months.

Alibaba share price volatility

Over the last 12 months, Alibaba's shares have ranged in value from as little as US$169.95 up to US$319.32. A popular way to gauge a stock's volatility is its "beta".

Beta is a measure of a share's volatility in relation to the market. The market (NYSE average) beta is 1, while Alibaba's is 0.989. This would suggest that Alibaba's shares are less volatile than average (for this exchange).

Alibaba overview

Alibaba Group Holding Limited, through its subsidiaries, provides online and mobile commerce businesses in the People's Republic of China and internationally. It operates through four segments: Core Commerce, Cloud Computing, Digital Media and Entertainment, and Innovation Initiatives and Others. The company operates Taobao Marketplace, a mobile commerce destination; Tmall, a third-party online and mobile commerce platform for brands and retailers; Alibaba Health Internet platforms for pharmaceutical and healthcare products; Alimama, a monetization platform; 1688.com and Alibaba.com, which are online wholesale marketplaces; AliExpress, a retail marketplace; Lazada, an e-commerce platform; and Tmall Global, an import e-commerce platform. It also operates Lingshoutong, a digital sourcing platform; Cainiao Network logistic services platform; Ele.me, a delivery and local services platform; Koubei, a restaurant and local services guide platform; and Fliggy, an online travel platform. In addition, the company offers pay-for-performance and display marketing services; and Taobao Ad Network and Exchange, a real-time bidding online marketing exchange. Further, it provides elastic computing, database, storage, virtualization network, large-scale computing, security, management and application, big data analytics, and Internet of Things and other services for enterprises; payment and escrow services; and movies, television series, variety shows, animations, and other video content. Additionally, the company operates Youku, an online video platform; Alibaba Pictures and other content platforms that provide online videos, films, live events, news feeds, literature, music, and others; Amap, a mobile digital map, navigation, and real-time traffic information app; DingTalk, a business efficiency app; and Tmall Genie, an AI-powered smart speaker. The company was founded in 1999 and is based in Hangzhou, the People's Republic of China.

Frequently asked questions

• What percentage of Alibaba is owned by insiders or institutions?

  Currently 0.225% of Alibaba shares are held by insiders and 43.861% by institutions.

• When does the fiscal year end for Alibaba?

  Alibaba's fiscal year ends in March.

• Where is Alibaba based?

  Alibaba's address is: 969 West Wen Yi Road, Hangzhou, China, 311121

• What is Alibaba's ISIN number?

  Alibaba's international securities identification number is: US01609W1027

• What is Alibaba's CUSIP number?

  Alibaba's Committee on Uniform Securities Identification Procedures number is: 01609W102