Vipshop Holdings Ltd – ADR (NYSE:VIPS)
Provides 167% Potential Profit!
by Ian Harvey
January 11, 2018
Vipshop Holdings Ltd – ADR (NYSE:VIPS)
Here is an update of Vipshop Holdings winning options call trade due to speculation of investments by Chinese internet giant Tencent Holdings (NASDAQOTH:TCEHY) and one by Chinese e-commerce company JD.com (NASDAQ:JD). This options trade was recommended, to “Cut-To-The-Chase” Members of Stock Options Made Easy, on Friday, January 05, 2018 -- in the article ““Cut-to-the-Chase” Recommendations - Week Beginning Monday, January 01, 2018”; which produced excellent potential profits of 167% within a trading day of executing the trade!
YOU NEED TO BE IN TO PROFIT!The Recommendation……
Vipshop Holdings Ltd – ADR (NYSE:VIPS), an online discount retailer for brands in China, has a totally different business model than BABA and JD, and all three companies can coexist together. VIPS is an online discount retailer, so it does not directly compete with BABA and JD. For comparison with the situation in the US, it is like Ross Stores (ROST) competing with Best Buy (BBY). Both are retailers but their business model is totally different and they even sell different goods. The same applies to VIPS in China. VIPS revenue comes mainly from selling apparels. Selling apparels also have some advantages over selling other goods. E.g., it has higher gross margin: VIPS has 24% and JD 15%. I believe it is more appropriate to compare VIPS with other online pure-play apparel retailers.
Vipshop Holdings Limited is estimated to report earnings on Monday, February 19, 2018. Equities research analysts predict that Vipshop Holdings will post $0.20 earnings per share for the current fiscal quarter…….
……VIPS is operating in a niche market. It is the largest discount retailer in China, so it is naturally the first choice retailer for companies which need to sell unsold inventory. No other competitor can offer the same customer reach. BABA and JD, of course, have more customers, but companies which sell branded goods usually do not want to mix their new collection (which is fully priced) with old collections (which are selling at a discount). VIPS has ROE > 30% and ROIC > 40%......
……Source of future growth: New deal with Tencent (OTCPK: TCEHY) and JD will accelerate revenue growth…….
** OPTION TRADE: Buy the VIPS FEB 16 2018 12.000 CALL at approximately $0.75.
The Surge ………
Vipshop Holdings jumped on Monday, following the disclosure of an investment by Chinese internet giant Tencent Holdings (NASDAQOTH:TCEHY) and one by Chinese e-commerce company JD.com (NASDAQ:JD). The stock finished the trading day up about 9.5%.
In two Dec. 8 SEC filings, Tencent disclosed that it now had a 7% stake in Vipshop, and JD.com revealed a 5.5% stake.
Strategic investments from Tencent and JD.com are meant to leverage and bolster each company's strengths "to form a strategic cooperative alliance aiming to achieve a deep, win-win cooperation and to benefit internet users and consumers," said Vipshop CEO Eric Ya Shen in a press release about the investments last December.
Specifically, Vipshop said it will develop cooperation with Tencent on its Weixin platform, explore opportunities with JD.com with brand suppliers and online traffic, and more.
Vipshop Holdings Limited was a big mover on Monday, as the company saw its shares rise as much as 10.7% on the day. The move came on solid volume too with far more shares changing hands than in a normal session. This continues the recent uptrend for the company-as the stock is now up 60.5% in the past one-month time frame.
The stock finished the trading day up about 9.5%.
At the time of the recommendation the stock was trading at $12.00.
So, for those traders who managed to execute this trade recommended by Stock Options Made Easy; a nice tidy potential profit of 167% within a couple of trading days.
ACTION TO TAKE…….
"YOU NEED TO BE IN IT TO WIN IT!"
As you would have by now realized, many of our trades are based on earnings predictions. This is not to say all trades recommended to members follow this pattern, but during earnings season this strategy has been very profitable.
Our approach is to predict whether a company will beat or miss estimates, whether the stock will appreciate or depreciate as a result and what strategies investors and traders can use. This type of prediction is based on thorough investigation and fundamentally based research, and the results have been very exceptional.Our proven track record says it all!!
Members of Stock Options Made Easy are provided with an extensive reason as to which direction a stock will move after earnings, followed up by a recommended options trade.
What To Do Now…….
If you interested in being part of this profitable action just click here……