Vipshop Holdings Ltd ADR A (VIPS) Flagged As Strong On High Volume

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified Vipshop Holdings Ltd ADR A ( VIPS) as a strong on high relative volume 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 $461.3 million.
  • VIPS has traded 2.0 million shares today.
  • VIPS is trading at 2.49 times the normal volume for the stock at this time of day.
  • VIPS is trading at a new high 6.01% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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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 77. Currently there are 9 analysts that rate Vipshop Holdings Ltd ADR A a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Vipshop Holdings Ltd ADR A has been 7.0 million shares per day over the past 30 days. Vipshop Holdings Ltd ADR A has a market cap of $14.7 billion and is part of the services sector and retail industry. Shares are up 26.9% year-to-date as of the close of trading on Thursday.

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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, compelling growth in net income and solid stock price performance. 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 greatly exceeded the industry average of 19.1%. Since the same quarter one year prior, revenues leaped by 108.8%. 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 ($0.54 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 122.8% when compared to the same quarter one year prior, rising from $25.40 million to $56.58 million.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. 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.
  • Powered by its strong earnings growth of 109.30% and other important driving factors, this stock has surged by 68.06% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

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