Trade-Ideas LLC identified

Vipshop Holdings Ltd ADR A

(

VIPS

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Vipshop Holdings Ltd ADR A 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 $174.7 million.
  • VIPS has traded 121,642 shares today.
  • VIPS is down 3% today.
  • VIPS was up 6.8% 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 56. Currently there are 9 analysts that rate Vipshop Holdings Ltd ADR A a buy, no analysts rate it a sell, and 1 rates it a hold.

TheStreet Recommends

The average volume for Vipshop Holdings Ltd ADR A has been 8.9 million shares per day over the past 30 days. Vipshop Holdings Ltd ADR A has a market cap of $10.7 billion and is part of the services sector and retail industry. Shares are down 4.7% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Vipshop Holdings Ltd ADR A as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, 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 lackluster performance in the stock itself.

Highlights from the ratings report include:

  • VIPS's very impressive revenue growth greatly exceeded the industry average of 33.4%. Since the same quarter one year prior, revenues leaped by 97.9%. 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 ($0.59 versus $0.23).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet & Catalog Retail industry. The net income increased by 122.9% when compared to the same quarter one year prior, rising from $26.59 million to $59.29 million.
  • 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 gross profit margin for VIPSHOP HOLDINGS LTD -ADR is rather low; currently it is at 24.86%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 4.26% is above that of the industry average.

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