Dangdang and LightInTheBox Are Passing Ships

The third time could be the charm for Vipship as it follows Dangdang and LightInTheBox.

Mar 1, 2014 at 6:00PM

It was feast or famine for investors in Chinese Internet retailers this past week. Shares of online bookseller Dangdang (NYSE:DANG) soared 37% after posting strong quarterly results, but LightInTheBox (NYSE:LITB) went the other way after once again disappointing the market.

LightInTheBox slumped 22% on the week, and you have to go back more than two weeks to find the last time the stock closed higher on a single trading day. LightInTheBox went public last year with an interesting model, sourcing fancy cocktail dresses, housewares, and other merchandise cheaply in China but selling them largely overseas. Europe accounts for nearly two-thirds of its sales.

Unfortunately, it seems as if every report in LightInTheBox's brief public tenure has been a letdown, and it was another meltdown this time around. Sales growth of 22% fell short of Wall Street expectations, and the pros also weren't betting on such a large quarterly deficit. 

Oppenheimer is not only downgrading the stock but also nixing its target price. Pacific Crest is also advising its clients to remain on the sidelines. The stock took a beating, but revenue growth is now expected to decelerate to the high single digits during the current quarter.

Adding insult to injury for LightInTheBox, Oppenheimer raised its price target on shares of Dangdang after its healthy report. The dot-com darling returning to profitability during the period, stunning analysts that were bracing for more red ink. Sales also come in stronger than anticipated, and the same can be said about its guidance.

Dangdang and LightInTheBox were polar opposites for the quarter in nearly every performance metric, and that opens the speculative door to see how Vipshop (NYSE:VIPS) fares when it reports after Monday's market close. To be fair, it shouldn't disappoint. Vipshop has been the fastest growing of the three -- by far -- and it's also been the one's that consistently profitable.

Analysts see the flash sale speedster growing its revenue by 87%, with profitability climbing even faster. Don't lump it in with LightInTheBox, which sells primarily to Europe and the Americas. Dangdang's a local provider of markdowns on fashionable apparel items. There's never a shortage of suppliers with overstocks, and Vipshop has established itself as the place to be score those bargains.

The smart money has to be on Vipshop following Dangdang -- not LightInTheBox -- and doing an even better job of distancing itself from the pack when come Monday night.

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Rick Munarriz owns shares of LightInTheBox. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

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