Trade-Ideas: Vipshop Holdings (VIPS) Is Today's "Dead Cat Bounce" Stock - TheStreet

Trade-Ideas LLC identified

Vipshop Holdings

(

VIPS

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Vipshop Holdings as such a stock due to the following factors:

  • VIPS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $114.1 million.
  • VIPS has traded 79,890 shares today.
  • VIPS is up 4.1% today.
  • VIPS was down 5.2% yesterday.

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More details on VIPS:

Vipshop Holdings Limited, through its subsidiaries, operates as an online discount retailer for various brands in the People's Republic of China. VIPS has a PE ratio of 41. Currently there are 6 analysts that rate Vipshop Holdings a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Vipshop Holdings has been 14.6 million shares per day over the past 30 days. Vipshop has a market cap of $7.9 billion and is part of the services sector and retail industry. Shares are down 13.4% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Vipshop Holdings as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, reasonable valuation levels, impressive record of earnings per share growth and compelling growth in net income. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:

  • VIPS's very impressive revenue growth exceeded the industry average of 37.3%. Since the same quarter one year prior, revenues leaped by 54.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • VIPSHOP HOLDINGS LTD -ADR reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, VIPSHOP HOLDINGS LTD -ADR increased its bottom line by earning $0.23 versus $0.09 in the prior year. This year, the market expects an improvement in earnings ($3.48 versus $0.23).
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Internet & Catalog Retail industry and the overall market, VIPSHOP HOLDINGS LTD -ADR's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Internet & Catalog Retail industry average, but is greater than that of the S&P 500. The net income increased by 79.9% when compared to the same quarter one year prior, rising from $27.70 million to $49.83 million.

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