In the coronavirus era, the best mutual funds are placing huge bets on retail giants Amazon.com (AMZN) and Alibaba (BABA). They’re also putting big bids on online marketplace pioneer eBay (EBAY). Ebay stock is closing in on a 61.16 buy point and a new all-time high.
In the latest reporting period, 18 of the best-performing money managers invested $519 million in eBay stock. During the same time, the best mutual funds put over $2.2 billion into Amazon stock and $886 million into Alibaba stock.
With the tech stocks continuing to lead the stock market rally, Ebay, Amazon and Alibaba have all earned a spot on the IBD Breakout Stocks Index. All three stocks also appear on IBD stocks lists that highlight the best stocks to buy and watch. The IBD Big Cap 20 features Ebay and Amazon, while Amazon and Alibaba are on the IBD 50.
Ebay, Amazon and Alibaba lead the No. 3-ranked internet retail industry group. Each sports the highest-possible 99 Composite Rating, meaning they’re outpacing 99% of all stocks in terms of the most important stock-picking criteria.
Who Joins Ebay, Amazon, Alibaba On The IBD Breakout Stocks Index?
Ebay Stock Bids On New All-Time High
Although eBay rose to fame in the dot-com era as a marketplace for selling used and collectible items, today 81% of the items sold on eBay are new. Plus, auction-style bidding has taken a back seat to fixed pricing, which now makes up 91% of eBay Marketplace.
Ebay bought online payments pioneer PayPal (PYPL) in 2002 for $1.5 billion. In 2015, eBay separated the business into two independent publicly traded companies. In 2018, eBay teamed up with Adyen, a leading global payments processor, to become its primary payments processing partner.
Today eBay has rebounded strongly from the coronavirus crash. It reported a 64% spike in earnings in Q2, and has averaged 32% growth over the past three quarters.
Ebay has an annual pretax profit margin of 26%, which trails that of Alibaba (32%), but trumps Amazon (5%).
Ebay Stock Sets Up New Buy Zone
Ebay is forming a cup-shaped chart pattern as it approaches the 61.16 entry. The stock has shown tight, healthy trading in its base after coming sharply off its March lows during the coronavirus crash.
On Wednesday, eBay stock flashed a positive reversal in below average, but rising volume. The stock rose just under 1% to close 4% below teh buy point.
The relative strength line remains off its old highs, so look for that to trend upward to show eBay stock is outperforming the overall market.
In addition to joining Amazon and Alibaba on the list of new buys by the best mutual funds, 89 A+ funds own shares in eBay stock. In another sign of institutional demand, eBay has a strong 1.5 up/down volume ratio and saw a big jump in fund ownership last quarter, from 2,031 funds to 2,279.
IBD Breakout Opportunities ETF
The IBD Breakout Opportunities ETF (BOUT) from Innovator Capital Management tracks the IBD Breakout Stocks Index. As with other index ETFs, this allows you to essentially invest in the entire index in addition to or rather than buying individual stocks. Learn more here about the ETF and Innovator funds.
Follow Matthew Galgani on Twitter at @IBD_MGalgani.
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View more information: https://www.investors.com/research/breakout-stocks-technical-analysis/ebay-stock-breakout-bid-joins-amazon-alibaba-among-best-mutual-funds/