VIPS [Vipshop Holdings Ltd]: Undervalued & Oversold

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Vipshop Holdings Ltd was caught up in the massive Archegos margin call resulting in the forced unwinding of stocks for a $2 billion loss for the over-leveraged hedge fund. The particulars of the margin call aren’t important, although its unclear if more selling is imminent. However the resulting value left behind in the Archegos wake presents a buying opportunity. And among my favorites is VIPS. I’ve been following VIPS since it was trading below $10.00 per share. Currently trading with a trailing P/E of 21.81 and a forward P/E of 16.31, analysts are expecting some serious growth in the next 12 months. The company has $795m in debt and are sitting on $2.96b in cash. VIPS is still likely in oversold territory. The stock stood up fairly well amid all of the recent sell offs as a result of rising bond yields, but the price couldn’t stand up to the forced liquidation of billions in Archegos stock amid a margin call. From March 23rd to March 26th VIPS dumped from over $45 per share to $26 per share. In short, the fundamentals of VIPS today remain the same as before March 23rd, with no news, no bad PR, and no change in their finances to justify such a harsh drop. As a result there is plenty of money to be made here at her new discounted price. Particularly if company finances continue to perform as indicated below! Additionally VIPS recently announced a $500,000,000 share buyback (Which I believe is their way of saying “hey, we’re fine.”) which should narrow the float quite a bit, by roughly 3-4%, resulting in even more value per share. This is a strong buy if there ever was one but I highly recommend taking it slow as indicated by THIS STRATEGY.

Remember as a Chinese based company VIPS isn’t beholden to the same reporting requirements as US based companies. Although I’ll be the first to admit they have perhaps one of the best investor relations webpages I’ve seen! And when dealing in international investments, particularly those in China, there are a whole other set of risks you’ll need to pay attention to. Communist Party regulatory issues, international trade disputes, currency devaluation, human rights issues, tension in the South China Sea, possibilities for sanctions, and other geopolitical issues (among the unforeseen), all add an extra layer of risk to investing in Chinese companies.

finviz dynamic chart for  VIPS

04/01/2021

Statistics

  • Current Value: $29.86
  • Market Cap: $20.265B
  • Trailing P/E: 21.81
  • Forward P/E: 16.31
  • Price to Sales (TTM): 1.26
  • EPS: 1.323
  • PB (MRQ): 0.60
  • Book Value Per Share (MRQ): $6.39
  • Revenue Per Share (TTM): $23.14
  • Gross Profit (TTM): $21.29b
  • Cash Per Share (MRQ): $4.37
  • Operating Cash Flow (TTM): 1.82B
  • Operating Cash Flow YoY Growth: 109.4%
  • Total Cash (MRQ) 2.96B
  • Debt to Asset Ratio 50.14%
  • Quarterly Revenue Growth YoY: 22%
  • Quarterly Revenue Growth YoY: 67.7%
  • EBITDA: 1.03B
  • Float: 428.09M
  • Institutional Ownership: 61.44%
  • Insider Ownership: 7.94%
  • Analyst Ratings: 24% Hold / 52% Buy / 24% Strong Buy out of25 analysts (Webull)
  • Price targets Low Med High: $19.18/$40.68/$51.94Projected Earnings Date: 5/26/2021 Pre Market (Usually Overnight for Chinese Companies)

Previous Earnings:

Feb. 25, 2021 5:11 AM ET Vipshop (NYSE:VIPS): Q4 Non-GAAP EPS of $0.57 beats by $0.09; GAAP EPS of $0.54 beats by $0.09. Revenue of $5.48B (+30.2% Y/Y) beats by $90M.

Nov. 13, 2020 5:09 AM ET Vipshop (NYSE:VIPS): Q3 Non-GAAP EPS of $0.30 beats by $0.04; GAAP EPS of $0.27 beats by $0.07. Revenue of $3.4B (+24.1% Y/Y) beats by $150M. Q3 GMV increased 21% Y/Y to RMB38.3B. The number of active customers increased 36% Y/Y to 43.4M; Total orders increased 35% to 172.8M.

Aug. 19, 2020 6:05 AM ET Vipshop (NYSE:VIPS): Q2 Non-GAAP EPADS of $0.27 misses by $0.01; GAAP EPADS of $0.32 beats by $0.09. Revenue of $3.41B (+3.3% Y/Y) in-line. Gross profit for the quarter was RMB4.9B (about $699.2M), as compared with RMB5.1B in the prior-year period.

May 27, 2020 6:05 AM ET Vipshop (NYSE:VIPS): Q1 Non-GAAP EPADS of $0.20 beats by $0.09; GAAP EPADS of $0.14 beats by $0.07. Revenue of $2.65B (-11.7% Y/Y) beats by $130M.

Investor Relations Website

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Most Recent 40-F

Most Recent 10-Q

Short Volume

Shares Available to Short

Upgrades & Downgrades

ETF’s that Hold VIPS

Company’s & Partners

SEC Filings

Last Earnings Call Transcript

Risk Factors

Analyst Coverage

Press Releases:

2021

DateTitle
03/30/21Vipshop Announces US$500 Million Share Repurchase Program
02/25/21Vipshop Reports Unaudited Fourth Quarter and Full Year 2020 Financial Results
02/16/21Vipshop to Announce Fourth Quarter and Full Year 2020 Financial Results

2020

11/13/20Vipshop Reports Unaudited Third Quarter 2020 Financial Results
11/03/20Vipshop to Announce Third Quarter 2020 Financial Results
11/03/20Vipshop Holdings Limited to Hold 2020 Annual General Meeting on December 4, 2020
11/02/20Vipshop Appoints Co-Chief Technology Officer
10/19/20Vipshop Appoints New Chief Financial Officer
08/19/20Vipshop Reports Unaudited Second Quarter 2020 Financial Results
08/11/20Vipshop to Announce Second Quarter 2020 Financial Results
05/27/20Vipshop Reports Unaudited First Quarter 2020 Financial Results
05/19/20Vipshop to Announce First Quarter 2020 Financial Results
04/27/20Vipshop Filed 2019 Annual Report on Form 20-F
03/05/20Vipshop Reports Unaudited Fourth Quarter and Full Year 2019 Financial Results
02/26/20Vipshop to Announce Fourth Quarter and Full Year 2019 Financial Results

IMPORTANT DISCLAIMER: I am NOT a registered investment adviser, broker dealer, or member of any other association for research providers in any jurisdiction whatsoever and I am NOT qualified to give financial advice. Investing/Trading in securities, particularly microcap securities, is highly speculative and carries an extremely high degree of risk. The information, analysis, and opinions listed above are my own and may not properly reflect the underlying conditions of a company or security. You should do your own Due Diligence. If you trade based on anything I have written YOU ACCEPT FULL RESPONSIBILITY AND LIABILITY for your own trades and actions and hold the author of this publication harmless. If that isn’t clear enough DO NOT TRADE, ACT, OR INVEST, BASED UPON ANYTHING I WRITE OR RECOMMEND. There, we should be solid now. 

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