The Alibaba (NYSE: BABA) share price has dived 56% over the past 12 months. I have been pretty shocked by this performance. Investors have been selling the shares in droves even though this e-commerce giant has continued to report impressive revenue growth.

Indeed, for the quarter ended September 2021, the company reported year-on-year revenue growth of 29%.

Booming market 

That is not all. As the group controls around 50% of the Chinese e-commerce market, it should be able to piggyback on the industry’s growth over the next five years. The Chinese e-commerce market is expected to grow at an annual growth rate of 12.4% over the next four years. 

Unfortunately, the situation is a little more complex than this. Suppose it was just a case of analysing the potential for growth in the Chinese e-commerce market over the next five to 10 years. In that case, I think investor sentiment towards the Alibaba share price would be significantly better than it is today. 

It seems as if there are a couple of other reasons why investors are avoiding the shares. The biggest appears to be the changing regulatory environment throughout China. The country’s “common prosperity” drive and the recent regulatory crackdown has rocked the region’s technology sector.

Alibaba has announced it will be investing $15.5bn to enhance common prosperity over the next four years. Put simply, this means the company will be giving away the money. 

Spending $15.5bn on government initiatives will almost certainly impact on the group’s growth. It is money the company cannot use to pursue its own ambitions. 

Alibaba share price risks

At this point, there is no telling if the government will demand yet more  from Alibaba. There is also no telling if government regulators will intensify their attack on technology enterprises like this one. In 2021, regulators slapped a $2.8bn fine on the business for anti-trust issues. And another penalty was issued earlier this year. 

These challenges illustrate why investors have been avoiding the Alibaba share price. While I believe this business is one of the best ways to invest in the growing Chinese e-commerce market, I am incredibly concerned about the issues outlined above.

If the company has to foot the bill for further fines and common prosperity initiatives, it will struggle to maintain its market share and capitalise on the wider market growth. 

And if the business loses market share over the next few years, the enterprise will be worth less in the future than it is today.

As such, it is too difficult for me to place a value on the Alibaba share price based on what I know right now. For that reason, I will continue avoiding the company, at least until there is some more clarity on regulators’ intentions. 

Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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One of the most popular REITs for investors seeking monthly dividends is Realty Income. While I like it, and I own the shares in my portfolio, I think that Agree Realty (NYSE: ADC) might actually be the best monthly dividend stock I own.

Agree Realty has a lot in common with Realty Income. Both companies focus on leasing retail properties to tenants and distributing rental income in the form of a monthly dividend. Both also target tenants that have investment-grade credit ratings. Lastly, both aim to concentrate their portfolios in areas that are should be immune to the rise of e-commerce.

Agree Realty

I think that Agree Realty has a lot of intrinsic merits as a monthly dividend stock. Two things from the company’s January 2022 investor presentation stand out to me. First, the company is in a strong financial position. Since 2016, it has been strengthening its balance sheet by disposing of properties outside of its core strengths. In doing so, the company has raised around $400m. Its financial strength is further supplemented by the fact that it has less than $100m in debt due to mature before 2025.

Second, the company’s income stream is well diversified. Agree Realty owns 1,404 retail properties in 47 US states. The company’s tenant base is also well diversified, with the largest three tenants only accounting for 15% of its overall base. This limits the risk of losing substantial income due to a particular tenant being unable to pay rent.

Risk

The biggest risk with Agree Realty as a monthly dividend stock, in my opinion, comes from the quality of its tenant base. While the company targets tenants with investment grade credit ratings, only 67% of the company’s tenant base has this rating. I’d like the number to be higher, especially with interest rates rising. Higher interest rates might increase the risk of tenants with weaker credit ratings being unable to pay their rents. 

In my view, however, this risk is reduced by the company’s strong record of rent collection. Between July 2020 and December 2021, Agree Realty collected at least 99% of its rent in every month. This indicates that the vast majority of the company’s tenants are generally reliable when it comes to paying. It also indicates that the monthly dividend is reasonably secure, which good for investors.

Insider buying

I think that Agree Realty shares trade at an attractive price today. My conviction is strengthened by the fact that insiders at the company seem to share this view. During 2021, the company’s CEO, COO, and other executives bought substantial amounts of shares for their own portfolios at prices higher than the current share price. When a company’s executives buy shares with their own money I view this as a strong sign that they have confidence in the company and view the shares as priced attractively.

The combination of an impressive record of consistent rent collection, a strong balance sheet that allows financial flexibility, and recent insider buying at levels higher than the current share price brings me to believe that Agree Realty is the best monthly dividend stock in my portfolio. I’d happily buy more today.

Stephen Wright owns shares in Agree Realty and Realty Income. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Meta (NASDAQ: FB) shares tanked last week after the Facebook owner published its results for the fourth quarter of 2021. 

The stock chalked up the single biggest one-day market capitalisation loss in history, losing $230bn after it warned investors that growth could slow going forward.

It looks as if this came as a surprise to many investors, who had become accustomed to its market-beating performance. 

However, I think this could be an opportunity for long-term investors like myself. 

Attractive qualities

While Facebook did disappoint the market with its latest earnings release, the company still has a dominant market position in the social media space. What’s more, its online advertising division is one of the largest globally, and the business generates vast amounts of cash flow, the lifeblood of any organisation. 

I do not already own the stock in my portfolio. However, I do have exposure to the business through investment funds. And as Meta shares plunge, I have been wondering if I should dive deeper into the investment and buy a direct position in the company. 

Outstanding growth

Over the past five years, Facebook and its parent organisation have grown to become one of the most sought-after businesses on the US market. It is clear to me why investors have been clamouring to buy the stock. The company’s growth has been nothing short of outstanding since 2016. Earnings per share have increased to the compound annual rate of 32%.

On top of this, the corporation is highly cash generative. In 2021, the enterprise generated a free cash flow per share of $13.70. That puts the stock on a current free cash flow yield of 6.1%.

This looks incredibly cheap for a business with an operating profit margin of nearly 40%.

Other technology companies are trading at a free cash flow yield of around 3%, implying that Meta shares are undervalued by as much as 100%. 

Of course, this figure is just an estimate. There is no guarantee the stock will ever trade back up to the sector average. Nevertheless, I think the numbers illustrate the potential here. 

Headwinds for Meta shares

The company’s one big challenge over the next couple of years is maintaining its historical growth rate. Unfortunately, I think it is likely growth will slow in the years ahead. The enterprise has already said as much in its latest earnings release. Privacy issues and competitive forces mean that the platform is no longer as attractive to advertisers as it once was. 

That said, Meta is not shrinking. It is just not growing as fast. There is a big difference. This is where I believe the opportunity lies. 

With this being the case, I plan to boost the stock’s presence in my portfolio. I think the market has overreacted to the company’s slowdown. This is a fantastic opportunity for me to buy into a highly cash generative, cheap enterprise that still has market-beating profit margins. 

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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I’m considering adding to my position in Bloomsbury Publishing (LSE: BMY). The company has a great mix of growth and income characteristics, and has been trading well lately. This is why I think it’s one of my best stocks to buy now for my portfolio. Let’s take a closer look.

The investment case

Bloomsbury was the original publisher of the hugely successful Harry Potter books, and it still benefits from strong sales of the series. Indeed, in the half-year results to 31 August, Harry Potter and the Philosopher’s Stone was the UK’s fourth bestselling children’s book of the year-to-date. Remarkably, this was 24 years after it was first published. New stories are still being released, too. It provides Bloomsbury an excellent base for earnings and cash flow generation.

There’s also diversification in the business because Bloomsbury has a non-consumer publishing division. It covers Academic & Professional, Educational, and Special Interest publishing, which the company says generates more predictable revenue at higher margin. I’ve also been impressed by the launch of Bloomsbury Digital Resources (BDR). It’s an online research portal for the education sector and has been growing well of late. In fact, Bloomsbury recently said BDR reached its six-year target of £15m of sales and £5m of profit by the year ending 28 February 2022 (FY22).

Bloomsbury also released a positive trading update for FY22 this month, saying “revenue is expected to be comfortably ahead and profit materially ahead of market expectations.” It prompted City analysts to upgrade their own forecasts for the company. Revenue is now expected to rise by 12% in FY22, and profit before tax by 24%.

The valuation is reasonable to my mind. Based on a forward price-to-earnings ratio, the shares trade on a multiple of 18. This should fall to 17 in FY23 on forecasted earnings growth of 9%. However, I think Bloomsbury will beat these forecasts next year given the positive trading momentum right now. Also, the forward dividend yield is 2.5%, which is a good level of income for my portfolio.

Risks to consider even with my best stocks to buy

The first risk I see to Bloomsbury is competition for the consumer publishing division. Any new popular book, or a new trend within the wider entertainment sector, may reduce demand for Bloomsbury’s products.

The company has also been acquisitive of late. Bloomsbury acquired three businesses in 2021 to strengthen its consumer division, and Bloomsbury Digital Resources. There’s never a guarantee that another business will integrate well with the acquiring company. Different cultures might not blend well together, and there’s always a risk of overpaying for the business itself.

However, one final strength of Bloomsbury comes from the CEO, Nigel Newton. He founded the company back in 1986 and has grown the business to where it is today. Newton also retains a significant shareholding in Bloomsbury. This gives me confidence that his interests are fully aligned with shareholders.

Taking everything into account, I view Bloomsbury as one of my best stocks to buy today. I’d add to my position in my portfolio.

Dan Appleby owns shares of Bloomsbury Publishing. The Motley Fool UK has recommended Bloomsbury Publishing. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

I’m finding it a difficult time to invest right now. We’re in an inflationary environment and worries about rising interest rates are causing stock market volatility. Against this backdrop, I’m looking for a top exchange traded fund (ETF) pick for the long haul. Something that I’m hopefully comfortable holding for years to come.

I’m looking for an ETF paying high dividends and want companies within a fund like this to be steady, reliable firms in solid sectors. For me, that’s a good long-term investment.

A top ETF pick

SPDR S&P Global Dividend Aristocrats UCITS ETF (LSE: GBDV) is one I’ve been considering for a while. It aims to invest in high-dividend-yielding companies by tracking the S&P Global Dividend Aristocrats Quality Income Index. This includes companies that have over $1bn in market capitalisation and that have maintained or increased dividends for at least 10 consecutive years. Firms must also have a positive return on equity and cash flows from operations.

This ETF is a good size at over $700m and is relatively low-cost. For my portfolio, diversification is one of the ways I try to reduce risk over the long term and this ETF ticks all the boxes across companies, countries and sectors.

Firstly, there are around 100 companies in this fund, with no company having more than 3% weighting within it. There are some household names in there like Exxon Mobil Corp and GlaxoSmithKline. Secondly, the fund is geographically diverse. Some 45% is invested in US companies, around 8% is invested in both the UK and Japan, while other holdings come from all over the world. Finally, I like the fact that sectors as varied as banking, utilities and insurance are covered. 

The dividend yield is currently around 3.7%, which is a reasonable return given the diversity of the fund.

Over the long run

Of course, it’s not risk-free. Dividends can be reduced at any time and not all high-yielding shares are winners. Some companies maintain high dividends to keep their investors happy when the company isn’t growing. In the long run, firms like these are unlikely to grow.

However, though nothing is certain, there are three reasons why I still have confidence in this ETF for the long haul. I like that no company has more than a 3% weighting. Even if one firm fails, it shouldn’t be too significant to my holdings overall.

Then, if and when there’s a stock market decline, this ETF may well be less volatile than some other funds or shares out there. This is because investors may hang on for the dividend stream rather than selling.

Finally, the fund’s policy of only holding companies with strong track records over 10 years+, underlines its long-term focus. And I feel firms like these have the potential to produce dividend streams for a long time into the future, even though I know past performance is no guarantee of what might happen next.

That’s why for my own portfolio, this is a top ETF pick that I’d buy and hold for years.

Niki Jerath does not own any of the shares mentioned. The Motley Fool UK has recommended GlaxoSmithKline. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The last time Argo Blockchain (LSE:ARB) shares closed above 100p was just before Christmas last year. Since then, the share price has struggled, closing last week at 78p. This means that over the past year, the Argo Blockchain share price is down almost 19%. With the fate of the company tied to the future of cryptocurrency, could a resurgence take the share price back to triple digits this year?

Argo Blockchain shares depend on crypto prices

Argo Blockchain is a cryptocurrency mining company. This means that it helps to verify and record transactions on the blockchain, as well as helping to build the blockchain in the process. Miners get rewarded in crypto, with Argo mostly receiving money in the form of Bitcoin.

The Argo Blockchain share price therefore has some correlation to the moves in Bitcoin. When the latter’s price was rallying Q1 of last year, Argo shares also roared higher. The coins being mined had a greater monetary value, so it helped to boost revenue and profitability at the firm.

The flipside is also true. With Bitcoin in a nosedive since early November, it’s not surprising that the share price has also moved below 100p. Fundamentally, I think that some of the future direction of Argo Blockchain shares is out of the hands of the management team. If Bitcoin and the crypto market in general can see more positive sentiment, then a rally higher this year is likely on the cards. 

From my point of view, I can’t accurately put a fair price on where Bitcoin and other coins should be trading. Therefore, from this angle I don’t think anyone can offer an opinion with any certainty.

Doing what’s in their power

What I can offer an opinion on is the direction of the business from the management team’s actions. In a recent investor presentation, the leaderships team laid out its vision for the future, which impressed me.

For example, it’s solidifying its presence in Quebec, due to the cheap and clean hydroelectricity. It’s also investing heavily in Texas, partly due to the state being the largest US wind generator with low electricity rates. This power generation should help the company be sustainable in sourcing power going forward.

The mining margin that it has is also the best in the sector, at 83%. This helped to push the EBITDA Margin to 73% for the first nine months of 2021. The bottom line here is that the company has a business model that works and is efficient. Expansion in Texas should drive further growth as operations scale up.

I imagine that we’ll continue to see growth in the numbers over the course of 2022. As such, I’d expect the Argo Blockchain share price to bounce higher this year.

In terms of investing, I think that this is a good business to consider. Based on the business alone, I do think the shares are poised for a move higher. However, the correlation to Bitcoin prices does worry me. As a result, I’d rather invest in other businesses that aren’t at the mercy of crypto swings. On that basis I won’t be investing in Argo Blockchain shares at the moment.

Jon Smith and The Motley Fool UK have no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of investment advice. Bitcoin and other cryptocurrencies are highly speculative and volatile assets, which carry several risks, including the total loss of any monies invested. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.