Why Vipshop Holdings Ltd. Skyrocketed

Is this meaningful or just another movement?

Mar 4, 2014 at 1:10PM

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 Vipshop Holdings (NYSE:VIPS) soared a whopping 30% today after the Chinese online retailer's quarterly results and outlook topped Wall Street expectations.

So what: The stock has soared over the past year on a string of better than expected results, and today's fourth-quarter numbers -- adjusted earnings per share of $0.49 (vs. the consensus of $0.41) on a revenue surge of 117% -- coupled with upbeat guidance suggest that growth is only accelerating. In fact, active customers during the quarter spiked 120% while gross margin expanded 160 basis points, giving analysts plenty of good vibes over Vipshop's competitive position.

Now what: Management now sees first-quarter revenue of $640 million-$650 million, well ahead of Wall Street's view of $578 million. "Heading into 2014, as our recent initiatives suggest, we are committed to further scaling our platform by improving our brand reputation, broadening our product offering, and enlarging our warehousing and logistics capabilities," said CFO Donghao Yang. "We also plan to continue to invest in strengthening our mobile and IT capabilities, in order to more optimally position ourselves to capitalize on the opportunities in China's dynamic, evolving eCommerce market." Of course, with the stock now up a staggering 680% over its 52-week lows and trading at a forward P/E of 50, I'd wait for some of the excitement to fade before buying into those prospects.

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Brian Pacampara has no position in any stocks mentioned. 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 may not 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.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.

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