Why Dangdang Shares Jumped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Dangdang (NYSE: DANG  ) have jumped by as much as 18% today following two analyst upgrades.

So what: BOC International boosted its rating from "hold" to "buy" while Morgan Stanley upgraded Dangdang from "equal weight" to "overweight." Morgan Stanley analyst Philip Wan expressed confidence that the company's margins are improving, and raised the firm's price target from $5 to $6.50.

Now what: Wan cites improving scale in the self-procurement business, among other things, and expects margins to continue improving if Dangdang continues to execute. The analyst notes that Dangdang's first-quarter results (reported last week) were ahead of his estimates, thanks to better sales mix and increased operating leverage. The $0.15-per-share loss it posted was better than the $0.19-per-share loss that the Street was expecting.

Interested in more info on Dangdang? Add it to your watchlist by clicking here.

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