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Alibaba Group Holding Ltd (BABA) Is Chasing Down Amazon

By U.S. News & World Report

After another up day for Alibaba Group Holding Ltd (NYSE: BABA) and a down day for Amazon.com ( AMZN) on Tuesday, Alibaba is within about $5 billion of eclipsing Amazon’s $474 billion market capitalization and reclaiming its title as the largest e-commerce company in the world.

Alibaba’s market cap has already more than doubled in 2017, but a new report from HSBC suggests the Alibaba rally has plenty of legs in the long term.

The last time Alibaba was larger than Amazon was in early 2015 when the two companies had market caps of around $200 billion each.

[See: 9 ETFs to Capture China’s Red-Hot Growth.]

According to analyst Chi Tsang, Alibaba is focused on growing and maintaining its market share at the expense of profits and margins. Alibaba has reported 49 percent year-over-year gross merchandise volume growth for its Tmall e-commerce platform in 2017. However, Tsang says Alibaba is not satisfied and may choose to increase its sales and marketing expenses in fiscal 2018.

This year, Alibaba increased its marketing spending by 21 percent to more than $683 million, but Tsang says Alibaba has the opportunity to spend more aggressively to compete for market share with Chinese rival JD.com ( JD) and others.

Over the next five years, Alibaba also plans to spend $15 billion on data technology and delivery with the goal of providing 24-hour delivery in China and 72-hour delivery worldwide.

[See: 10 Ways to Play in the Asia-Pacific Stocks Pool.]

Tsang says investors shouldn’t worry about margins getting squeezed in 2018 as long as Alibaba continues to outpace JD.com in gross merchandise value growth.

“Alibaba has valuable data assets on its consumers that it can leverage to increase value to both its brands and buyers, resulting in high monetization and margins,” Tsang says. “It is the thought leader in China retail and its new retail concept sets the stage for long-term value creation.”

In addition to its unparalleled e-commerce market positioning in China, Tsang says Alibaba stock remains an excellent long-term value as well. Even up 107 percent in 2017, Alibaba trades at just 25 times HSBC’s fiscal 2019 earnings per share estimate, a reasonable premium for a stock consistently delivering revenue growth topping 40 percent.

Looking ahead to the next three years, Tsang projects Alibaba will report 43 percent compound annual EPS growth as well.

[See: 10 Great Ways to Buy Emerging Markets.]

HSBC has a “buy” rating on Alibaba. If the stock continues its march to HSBC’s $204 price target, it’s only a matter of time before Alibaba passes Amazon as the world’s largest e-commerce company.

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Alibaba Group Holding Ltd (BABA) Is Chasing Down Amazon originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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