| Stock (Symbol) | Stock Price | |
Vipshop (VIPS) |
$217 |
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| Data is as of | Expected to Report | Sector |
August 27, 2014 |
N/A |
Retail & Travel |
| Sharek’s Take | ||
 Vipshop, an online flash-sale discount retailer in China, continues to light it up. Quarterly profits have jumped from $0.01 to 0.16, 0.17, 0.20, 0.26, 0.49, 0.63 and 0.72 the past eight qtrs. After going from $7.50 to $217 in two years, VIP has cemented itself as one of the all-time great growth stories. But I’m concerned, as VIPS is no longer undervalued. VIP’s P/E has risen from to 41, 59, 61, and now 73 since I first purchased VIPS in 2013 Q4. Still, I think VIPS can make $10 a share or more in 2016, and a P/E of 45 on that will cause the stock to double once more. VIPS is a top-holding of mine, and that will continue, but it isn’t undervalued like the other top holdings. The only negative this qtr is profit margins were down from last qtr (6.1% to 5.2%) but still way up year-over-year (5.2% vs. 2.7%). Also, VIPS will be investing in mobile and IT, and that could hurt margins going forward. |
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| One-Year Chart | ||
 The EST. LTG just jumped from 59% to 101%, and that’s the highest I’ve ever seen a stock have. So analysts think profits will double each year for the next three-to-five years. Wow. Look at how the company has gone from losing money to making $3 in two years. Triple digit growth everywhere. |
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| Earnings Table | ||
 Sales of $830 million bested the $700 million last quarter, and were up 136% year-over-year. Profit growth was 260% last qtr.VIPS continues to raise estimates then beat them. Raise and beat. Annual Profit Estimates continue to soar. I think $10 in profits could be had by 2016. Maybe $12. Quarterly estimates show triple-digit profit growth should last at least 2 more qtrs, maybe 4. |
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| Fair Value | ||
 VIPS is fairly valued on 2014 profits, but profits could rise to $7 next year and $10 the year after. So a 45 P/E on $10 in profits would be a $450 stock. Although this stock doesn’t seem to have upside, it does. |
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| Ten-Year Chart | ||
 Wow, what a thing of beauty. I’m going to frame this someday. Will be interesting to see what the first ten-years looks like. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
4 of 25 |
Vipshop is one of the best stocks of all time. I can’t even conceive how much money VIPS can make, so it’s hard to tell how high it can go. But there’s two risks to be aware of. First, the stock hasn’t had a meaningful correction and when that comes the tide could turn. Second, the stock’s not undervalued like it used to be. VIPS is ranked 4th of 25 stocks in the Growth Portfolio Power Rankings and 3rd of 12 stocks in the Aggressive Growth Portfolio Power Rankings. |
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Aggressive Growth Portfolio
3 of 12 |
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