|Bid||22.1500 x 800|
|Ask||22.1600 x 4000|
|Day's Range||21.98 - 22.60|
|52 Week Range||19.21 - 50.68|
|Beta (3Y Monthly)||1.08|
|PE Ratio (TTM)||150.58|
|Earnings Date||Feb 28, 2019 - Mar 4, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||27.60|
CNBC's Jim Cramer and technician Dan Fitzpatrick examine the charts of some Chinese stocks that could soon be ripe for the picking. Shares of high-quality companies like YY and JD.com might already be pricing in China's economic weakness, Fitzpatrick argues. Cramer, who has been steering investors away from Chinese stocks for the better part of the dispute, said he wouldn't blame anyone for thinking Chinese investments were too risky, especially after China announced that its economy grew at the slowest pace in nearly three decades last year.
Frankly, it's a bit surprising that Starbucks (NASDAQ:SBUX) stock has held up so well. I was bearish on the company throughout 2018, and I'd argue fundamentals have continued to support my outlook. However, let's give credit where credit is due. Starbucks stock is still near 52-week highs despite a rocky market and various pieces of company-specific bad news. That bad news should begin to weigh on SBUX in 2019 though. Among the worrisome signs, analysts are waking up to the increasing risk of Starbuck's aggressive China strategy. Goldman Sachs recently dropped its buy rating for SBUX, suggesting that China is weak and could lead to a profit warning out of that region. A new competitor in China is gearing up for a major fight with Starbucks. InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Dark Horse Stocks You Really Need to Look at for 2019 On top of that, the domestic market continues to be sluggish as competitors like Dunkin Donuts (NASDAQ:DNKN) keep pressuring Starbucks on the home front. Put it all together, and barring a major stock market rally in 2019, I don't see Starbucks stock advancing much beyond the $65 level. ### Luckin Coffee and Starbucks Stock In my previous articles about Starbucks, I've warned that the company is betting too heavily on China. In December, I noted that: "In the most recent earnings report, same store sales from China grew by just 1%. They grew at a significantly better rate in both the United States and the rest of the world excluding Asia. Starbucks is making a worrisome bet on a region that doesn't like their main product and is showing anemic sales growth already." Well, nothing has changed on that front. Starbucks is still pushing full steam ahead. Unfortunately, they're not the only company making a big play for the Chinese coffee market. Luckin Coffee launched in October 2017, but already is becoming a major competitor. Within a year, Luckin Coffee opened 1,500 stores and plans to open around 2,000 over the next year. Luckin has several major differences from Starbucks, based on this analysis from leading China expert Jeffrey Towson. For one, Luckin concentrates much less on the highest-traffic/price real estate. Instead, it locates a block or two from major pedestrian areas. This allows it much cheaper overhead. That functions well, since Luckin is concentrated on take-out orders; many of its locations don't even have seating. Luckin is going for a lower-price strategy, offering prices 20-30% below Starbucks. That still puts Luckin in the same affordable luxury category as Starbucks, but at a more accessible price point. Starbucks, for what it is worth, charges roughly the same prices in China as in New York City despite far lower incomes in China. Additionally, Luckin has an advanced digital strategy. In fact, they don't even take cash; all orders must be done through their smartphone app. It remains to be seen how badly Luckin will hurt Starbucks, but with prominent backers, Luckin is a serious threat. It's rumored that Luckin will be launching its IPO soon, as well. ### Starbucks: Making Moves of Its Own Bulls can counter the Luckin threat by suggesting that Starbucks has a cohesive strategy of its own. Starbucks' digital initiative appears to be paying off in the U.S. And in both the U.S., with Ubereats, and in China with Alibaba (NASDAQ:BABA), Starbucks has established strong delivery options of its own. This will keep Starbucks in the game when Luckin partners with the likes of JD.com (NASDAQ:JD), which has its own great logistics network, to fight for the delivery market. It's important to note that Starbucks isn't just betting on China internationally. The company is coming up on 15,000 stores total outside of the U.S. Starbucks has around 4,000 stores in China now, meaning that almost 11,000 or so are not in China. Many of these are in markets such as Latin America where incomes tend to be higher than in China on average, and there is also less local competition. Starbucks made another big play last summer. It offered exclusive distribution rights for packaged Starbucks coffee to Swiss giant Nestle (OTCMKTS:NSRGY) for more than $7 billion. While Starbucks gives up some upside from its consumer products, it gets plenty of other perks. For one, Nestle is a global leader in distributing consumer products and will undoubtedly get more shelf space for Starbucks in far-flung markets. Starbucks still gets a solid revenue share of the products. And as management described it, this is a "brand amplifier" for Starbucks as it gets their products in front of a wider consumer base who may then visit the company's cafes. ### Starbucks Stock Verdict It's not all bad news for Starbucks. The deal with Nestle in particular looks smart, and management is using the proceeds to buy back stock which will support the share price. The partnership with Alibaba could be enough to hold back competition in China as well; time will tell. The majority of signs still favor the bearish perspective on Starbucks stock, however. At more than 21x forward earnings, investors are paying a high price for SBUX. If it were still growing same-store sales quickly, that'd be one thing. But same-store sales both in the U.S. and China are quite weak. Starbucks has already raised prices repeatedly over the year, how much room do they have left to push that lever? On the expenditure side, rising labor costs will hit margins in the domestic market. Throw in strong competition in various key markets, and Starbucks has some challenges ahead. If a recession should happen to hit, it's not hard to see Starbucks stock dropping back to $50 as consumers have to curtail their spending. At this price, SBUX stock comes with more risk than reward. At the time of this writing, Ian Bezek owned JD stock. You can reach him on Twitter at @irbezek. ### More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 High-Growth Stocks for the Return of the Bull * The 10 Best Index Funds to Buy and Hold * 10 Lithium Stocks to Buy Despite the Market's Irrationality Compare Brokers The post Here's How a Poor China Strategy Could Sink Starbucks Stock in 2019 appeared first on InvestorPlace.
JD.com, Inc., “China’s leading technology driven e-commerce company and retail infrastructure service provider”, online or offline, has issued a new corporate social responsibility report, highlighting its commitment to global sustainability and dedication to giving back to the community. Projects such as the Green Stream Initiative and Recycling Program have reduced waste and emissions, as well as promoted sustainable consumption concepts to consumers to adopt in their daily lives. Additionally, JD’s unique “giving platform” leverages the company’s advanced technology and self-built inventory and logistics networks to provide a secure way to link consumers with organizations in need of supplies, speeding delivery of donated goods to their intended recipients and making them trackable at every point.
Moody's has also affirmed CNLP's B3 senior unsecured rating, and has changed the ratings outlook to negative from stable. "The downgrade of CNLP's rating reflects the fact that its interest coverage -- as measured by EBITDA/interest -- was below 1.0x in 2018 and will remain weak for the next 12 months," says Stephanie Lau, a Moody's Vice president and Senior Analyst.
Retailers are ramping up investments in artificial intelligence, especially in data-intensive areas such as customer service and supply-chain logistics. AI is showing up in automated chatbots, product distribution and optimized driving routes, too. Inc.’s Silicon Valley Research and Development Center, said Monday.
Key Questions as Facebook Gets Ready to Report Q4 Results (Continued from Prior Part) ## A $24 billion repurchase authorization As Facebook (FB) prepares to report its earnings for the fourth quarter of 2018, we note that the company last month boosted its share repurchase program by an additional $9.0 billion. The increase brings the company’s repurchase authorization since 2017 to $24 billion, considering that in April 2018 Facebook added $9.0 billion to its repurchase program, which already had a $6.0 billion authorization. Facebook had $3.5 billion remaining in its previous repurchase authorization at the end of September 2018, according to the company’s regulatory filing. Therefore, the latest addition means that Facebook now has $12.5 billion in its repurchase program. ## Companies have lined up fat repurchase programs Besides Facebook, other Internet companies that have lined up fat repurchase programs include Google parent Alphabet (GOOGL), Alibaba (BABA), and eBay (EBAY). In February last year, Alphabet announced an $8.6 billion repurchase program, and Alibaba is in the process of implementing its $6.0 billion two-year repurchase program. eBay had $4.7 billion remaining in its existing repurchase authorization at the end of September. JD.com (JD) recently announced a $1.0 billion repurchase program expiring in 2020. ## Repurchasing 86 million shares With $12.5 billion and the stock trading in the $145 range, Facebook could repurchase more than 86 million shares, or 3.0% of its outstanding shares. Since repurchases reduce the number of shares in circulation, they can lead to companies posting higher earnings per share without actually growing profits. Continue to Next Part Browse this series on Market Realist: * Part 1 - Did Facebook’s Revenue Continue to Grow in Q4? * Part 2 - Did Facebook’s Profitability Improve in Q4? * Part 3 - How Facebook’s Advertising Base Is Trending
reiterated that PCs containing CPUs relying on its delayed 10-nanometer (10nm) manufacturing process will be available in volume during the 2019 holiday season. The company also signaled that the 10nm CPUs arriving this year, which are based on a new microarchitecture called Ice Lake, will target thin-and-light notebooks and convertibles. For its part, just before CES, AMD unveiled second-gen Ryzen Mobile notebook processors that rely on a 12nm manufacturing process.
Alibaba (BABA) unveils A100 business partnership program that offers companies with solutions to accelerate digital transformation.
Several Chinese electronics retailers including Alibaba-backed Suning and JD.com (JD.O) have slashed iPhone prices this week, after Apple (AAPL.O) recently blamed poor sales of the smartphone in the country for a rare revenue warning. The discounting, as steep as $118 (92.50 pounds) for the recently launched 64GB iPhone XR, is the latest sign that Apple's weak holiday sales in China may have extended to the current quarter. The price cuts on iPhones by Chinese retailers began in the middle of this week, with at least six offering promotions this weekend, according to checks done by Reuters.
Investing.com - China software giant Kingsoft Corp Ltd (HK:3888) confirmed on Friday that it is in discussions with e-commerce giant Jd.Com (NASDAQ:JD) about a potential partnership.
Shares of Huya (NYSE:HUYA) have been on fire over the past few weeks. It's not just Huya stock either, as a number of Chinese equities are starting to gain some bullish momentum. Of course, it helps that the U.S. and China are seemingly finding common ground in recent trade talks. While the current trade spat may not directly impact a company like Huya or iQiyi (NASDAQ:IQ), it does impact the Chinese economy. * 12 2018 Winners That Will Be Big Ol' Losers in 2019 As you may or may not have read at this point, the Chinese economy is stumbling a bit. Granted, its growth remains robust compared to many developed nations, but manufacturing and other industries are taking a hit. Some companies are moving production out of the country due to the trade war. As a result, that hurts Chinese workers, which hurts the economy. Auto sales -- which enjoyed two decades of growth -- are stagnating. There are numerous data points suggesting the slowdown. I wouldn't say the sky is falling when it comes to the Chinese economy, but the nation is more vulnerable than many previously thought. The two countries have been hammering out talks for three days now, the last of which was unscheduled and suggests the meetings are progressing towards a solution. That presents both an opportunity and risk. While trade negotiations are playing the hero right now, they can just as easily play the villain. Should negotiations fall apart, look for it to deal a devastating blow to names like Huya, JD.com (NASDAQ:JD), iQiyi, Alibaba (NYSE:BABA) and others. InvestorPlace - Stock Market News, Stock Advice & Trading Tips That being said, should investors like Huya stock? ### Evaluating Huya Stock Huya is sort of like the Twitch of China. For those that don't know what Twitch is, it's an online game-streaming platform owned by Amazon (NASDAQ:AMZN). Given the growth in gaming and e-sports, it's no surprise that Twitch and other streaming platforms are benefiting as well. China's stance on video games is not as lenient as it is here in the U.S. Benefiting Huya was China's decision to ban Twitch. On the flip side, it also took a more strict approach to video games and which ones would be approved for consumers. Less games equals less streaming opportunities for Huya, which in turns hurts its growth. But all is not lost. Last quarter the company reported earnings of 8 cents per share and revenue of almost $186 million. That doubled analysts' earnings estimates and topped revenue expectations by more than $7 million, which rose by almost 120% year-over-year. User growth also showed impressive marks, with monthly active users up 14.6% and mobile monthly average users up over 28%. For the year, analysts expect earnings of 25 cents per share on revenue of $667 million. In 2019, estimates call for earnings to nearly double to 47 cents per share on revenue of $1.02 billion, up 53% year-over-year. If Huya can achieve those numbers, it's hard to imagine its stock trading below current levels. Hint: here are 8 other Chinese stocks with promising long-term future. ### Trading Huya Stock Click to Enlarge Huya stock went public in May at $12 per share and hit $50 per share a month later. This quadrupling in share price obviously meant Huya stock needed to cool off, and that's exactly what it's down. Shares have been trapped in a nasty downtrend for almost eight months. However, that came to an end a few days ago when Huya stock broke out over $16.50. Not only did the move propel Huya over the 21-day moving average, but also over downtrend resistance (blue line). It quickly tore higher, climbing 25% in five days and running into possible resistance near $20. Now what? Huya and other high-flying Chinese stocks have the potential to really rip if and when the U.S. and China put together an official trade deal. But until then, I'm still skeptical of the group, regardless of the breakouts. * 7 Tech Stocks That Can Lead a Sector Turnaround I am eventually looking for Huya stock to breakout over $20 to $21, which would put Huya over its 100-day moving average. But it wouldn't be the worst thing for the stock to pullback and/or consolidate for a bit now. Over the 21-day and 50-day moving averages, and the name is still attractive on the long side. It's imperative for the bulls to keep Huya over prior downtrend resistance and the $15 mark. Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long AMZN. ### More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks You Can Set and Forget (Even In This Market) * 10 Virtual Assistants for the Future of Smart Homes * 7 5G Stocks to Buy as the Race for Spectrum Tightens Compare Brokers The post Can Huya Stock Set Up for Another Massive Breakout? appeared first on InvestorPlace.
Tencent's (TCEHY) move to integrate voice assistant in WeChat is expected to provide the company a competitive edge in China.
President Trump continues to dominate the attention of the global media, from his ongoing trade spat with China (and hopes of a looming deal) to the machinations of the U.S. government shutdown and his pledge to fulfill a campaign promise to build a wall on the southern border. He was even partially responsible for the market unpleasantness in December, as he reportedly considered firing Federal Reserve chairman Jerome Powell for his policy hawkishness. Things have appeared to calm in recent days, with Trump shying away from declaring a national emergency at the Mexican border in his first Oval Office address Tuesday night. Perhaps the market is pricing in a loss of political capital, because a number of "Anti-Trump" stocks are moving higher, and quickly becoming stocks to buy again. They range all the way from Chinese tech giants to Mexican cement makers. I'm not making a political statement, but merely reporting the situation on the ground. InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Key Emerging-Market Stocks to Buy for Contrarian Investors With all of that said, here are five stocks to buy: ### JD.com (JD) Shares of online Chinese retailer JD.com (NASDAQ:JD) are emerging from a three-month consolidation range that capped an epic decline of more than 60% from the highs last January. This came despite evidence of a deepening slowdown in Chinese manufacturing activity and falling retail activity by China's consumers. Perhaps the market is pricing in a trade deal between the United States and China, an indication Trump may be softening his stance to bag a policy win. The company will next report results on Feb. 18, before the bell. Analysts are looking for a loss of 11 cents per share on revenues of $19.2 billion. When the company last reported on Nov. 19, earnings of 80 cents per share beat estimates by 13 cents per share on a 25.1% rise in revenues. ### Cemex (CX) Shares of Mexican cement maker Cemex (NYSE:CX) are rallying off of a three-month low that has capped a decline of roughly 55% from the highs seen in the summer 2017. It seems ironic that a Mexican maker of the stuff Trump wants to use to build the border wall -- beautiful and strong cement -- is rallying as the odds of such a barrier being built fade. * 10 Stocks You Can Set and Forget (Even In This Market) Instead, the latest is that a steel slat barrier (or fence?) is the best outcome for him. Shares are benefiting from a general rise in emerging market stocks thanks to weakness in the U.S. dollar and signs of slowing in the U.S. economy. ### Alibaba (BABA) Chinese internet giant Alibaba (NYSE:BABA) is watching as its shares rally back over its 50-day moving average in another upside breakout attempt. The move marks the third bounce off of support at the $130-a-share level, which capped a near 40% decline from the summer 2018 high. Trump has in the past pointed to weakness in Chinese stocks as evidence he was winning the trade war. Unfortunately, the performance gap has closed in recent weeks. Strength in stocks like BABA will close the gap further. The company will next report results on Feb. 1 before the bell. Analysts are looking for earnings of $1.38 per share on revenues of $17.3 billion. The company last reported results on Nov. 2, with earnings of $1.11 per share beating estimates by a penny on a 49.6% rise in revenues. ### Amazon (AMZN) Tech giants like Amazon (NASDAQ:AMZN) have been a frequent foil for Trump and his supporters amid accusations of bias against conservative voices as well as CEO Jeff Bezos' purchase and operation of the Washington Post, which is no fan of the President. Trump has frequently threatened to tighten regulation on these guys, including raising the cost of shipping via the U.S. Postal Service. * 7 Dow Jones Stocks Set to Charge Higher After a nasty 30%+ decline from its September high, AMZN shares are on the path to recovery and are making another challenge of its 200-day moving average. The company will next report results on Jan. 31 after the close. Analysts are looking for earnings of $5.48 per share on revenues of $73.9 billion. When the company last reported on Oct. 25, earnings of $5.75 beat estimates by $2.66 on a 29.3% rise in revenues. ### Facebook (FB) Shares of Facebook (NASDAQ:FB), the social media platform that has been plagued by privacy scandals and frequent criticisms of leaning against conservative media, have broken above their 50-day moving average for the first time since July. This move is beginning to unwind the decline of more than 40% from the highs seen in July. The company will next report results on Jan. 30 after the close. Analysts are looking for earnings of $2.17 per share on revenues of $16.4 billion. When the company last reported on Oct. 30, earnings of $1.76 per share beat estimates by 32 cents on a 32.9% rise in revenues. As of this writing, William Roth did not hold a position in any of the aforementioned securities. ### More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Retail Stocks to Buy for Winning the Online Battle * The 7 Best Stocks in the Entrepreneur Index * 7 5G Stocks to Buy as the Race for Spectrum Tightens Compare Brokers The post 5 "Anti-Trump" Stocks to Buy As They Blitz Higher Today appeared first on InvestorPlace.
Could Amazon’s Fourth-Quarter Results Beat Analysts’ Expectations? (Continued from Prior Part) ## Fulfillment by Amazon fees set to increase Amazon (AMZN) plans to raise the fees it charges sellers to deliver items to customers under its FBA (Fulfillment by Amazon) program, effective February 2019. The fee hike, which mostly applies to items weighing more than 10 ounces, is aimed at sellers in the United States. The company said it was adjusting the fees to reflect changes in fulfillment and transportation costs. In addition to raising shipping fees on items of a certain weight, Amazon has introduced separate fees for potentially dangerous goods such as flammable or aerosol substances. ## Accident at Amazon warehouse The introduction of a dangerous goods shipping fee comes after dozens of Amazon workers became ill after a can of aerosol leaked at a warehouse in New Jersey, according to The Washington Post. The fee may be aimed at discouraging sellers from sending such items to Amazon’s warehouses or having sellers pay more to use the Amazon system to fulfill orders for dangerous items. ## Employees’ health cost Amazon employed 613,300 people worldwide at the end of the third quarter, while rivals JD.com (JD) and Alibaba (BABA) had a workforce of 175,366 and 93,397 employees, respectively. To lower employees’ health costs, Amazon has teamed up with Berkshire Hathaway (BRK) and JPMorgan Chase (JPM) on a health insurance program. Browse this series on Market Realist: * Part 1 - Could Amazon’s Fourth-Quarter Revenue Beat Analysts’ Expectation? * Part 2 - How Amazon’s Wage Hikes Could Affect Its Bottom Line * Part 3 - Amazon Is Losing Ground in a Market It Pioneered
Indonesia's Go-Jek suffered a setback to its expansion plans on Wednesday after the transport regulator in the Philippines rejected its application to launch a ride-hailing service, saying its domestic unit did not meet local ownership criteria. "Go-Jek can get a local partner that will own at least 60 percent of the ride-hailing entity to comply with the law," said January Sabale, head of communications at the Land Transportation Franchising and Regulatory Board (LTFRB). The firm has raised billions of dollars from investors such as Tencent Holdings Ltd , JD.com Inc (JD.O) and Temasek Holdings (Private) Ltd [TEM.UL] to challenge market leader Grab.
The Philippines' transport regulator has rejected an application from Indonesia's Go-Jek to launch a ride-hailing service in the country due to foreign ownership issues, a government official said on Wednesday. The move puts a wrench in Go-Jek's plan to corner a bigger share of the Southeast Asian ride-hailing market, currently dominated by rival Singapore-based Grab. The Land Transportation Franchising and Regulatory Board (LTFRB) denied the petition of Go-Jek's subsidiary to become the newest ride-hailing service in the Philippines, the regulator's chairman, Martin Delgra, told Reuters.
The Chinese economy is definitely losing momentum, as President Trump's tariffs continue to take a toll on it. Nevertheless, some Chinese stocks have reached bargain levels. Just look at Alibaba (NYSE:BABA), which is one of China's premier tech operators. Since June, Alibaba stock has tumbled about 30%, making its valuation quite reasonable, especially given BABA's multiple businesses which are poised to benefit from strong, continuous growth trends. ### China Does Have Problems There's no doubt that China's economy is facing meaningful headwinds. The country's central bank has been pursuing a loose monetary policy, but it is not having much of an impact. For example, in December China's manufacturing activity fell from to 49.4 from 50 in November, representing the first drop since 2016. What's more, Apple's (NASDAQ:APPL) disappointing guidance was another ominous sign for China's economy. InvestorPlace - Stock Market News, Stock Advice & Trading Tips * The 7 Best Stocks in the Entrepreneur Index China's economy also suffers from excesses in real estate and construction that are not connected to the trade war with the U.S. But the selling of Chinese stocks may have been overdone. In other words, there are some interesting bargains emerging, including BABA stock. In this environment, Alibaba stock is one name that investors should consider. ### Alibaba's E-Commerce Business Should Boost BABA Stock BABA's e-commerce platforms continue to grow at a solid pace. In the third quarter, the segment's revenues jumped 56% year-over-year to $10.5 billion. The number of consumers who used the platform during the previous year jumped 25 million versus Q2 to a total of 601 million. Finally, the unit's mobile MAUs (Monthly Active Users) surged 32 million to 666 million. One key to BABA's growth has been its major investments in Taobao, its primarily consumer-driven, e-commerce website. The website's user interface has been revamped, making it easier for merchants and consumers to use it. Taobao has also increased its use of artificial intelligence and has improved its recommendation feed. Another one of Alibaba's consumer-driven, e-commerce websites, Tmall, has also been improved. Long-term, continuous positive catalysts should drive BABA's e-commerce revenue higher, lifting BABA stock. These catalysts are expected to boost China's e-commerce spending from $470 billion in 2018 to $839.54 billion by 2021. ### Alibaba's Cloud Business Should Boost BABA Stock BABA has emulated Amazon's (NASDAQ:AMZN) expansion into the lucrative cloud- computing market. So far, it's been a big-time winner for BABA. In Q3, the unit's top line soared by 90% year-over-year to $825 million. BABA has the advantage of hosting large numbers of merchants, which has been a critical factor in its development of hosting infrastructure. The company has also been investing heavily in adding new features to its cloud offerings. In fact, it added over 600 new features in Q3, including enhancements related to big data analytics, security, Internet-of-Things, and AI. ### The Valuation of BABA Stock The slowing of the Chinese economy will definitely weigh on BABA's growth. But it does look like much of that reduced growth has already been baked into BABA stock. Keep in mind that the forward price-earnings multiple of Alibaba stock is 20. By comparison, rival JD.com (NASDAQ:JD) is trading with a price-earnings multiple of about 39. And of course, BABA trades at a steep discount to AMZN's P/E multiple of 57. So even if BABA's top-line drops meaningfully, by 10% or more, its valuation will still be reasonable. Besides, as noted above, BABA should continue to benefit from the strong, continuous megatrends of e-commerce and cloud computing. Meanwhile Wall Street analysts remain bullish on BABA, as their average price target on BABA stock is $202, representing upside of about 40% from the shares' current levels. Tom Taulli is the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities. ### More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks to Buy Down 20% in December * 5 Chinese Stocks to Avoid Now (But Buy Later) * 3 Big Gainers That Easily Could Be the Best Stocks to Buy Compare Brokers The post 3 Reasons to Be Bullish on Alibaba Stock appeared first on InvestorPlace.
The Latest Deals and Strategies at Amazon and Alibaba (Continued from Prior Part) ## Disgruntled investors pursued Alibaba Alibaba (BABA) has entered into an agreement to settle a California class action lawsuit that alleges the company violated the United States Securities Act of 1933, a regulation that deals with transparency in the sale of securities to the public in the United States. The lawsuit was brought forward in October 2015, one year after Alibaba’s IPO in the United States. The suit was brought on behalf of investors who had purchased Alibaba shares and felt that the company had failed to provide full public disclosure of its securities so that potential investors could make fully informed buying decisions. ## Alibaba to pay $75 million for the settlement Alibaba agreed to pay $75 million to settle the lawsuit without admitting to any wrongdoing. The settlement covers investors who purchased Alibaba shares on or before October 5, 2015. Alibaba expects the court to approve the settlement by April so that it can put the matter behind it. The settlement is unlikely to have a big impact on Alibaba’s finances, as the company said it anticipates the settlement payment to come from its directors and officers liability insurance. Alibaba is facing another lawsuit related to its IPO in New York, which remains unresolved. ## Alibaba’s revenue jumped 54% Alibaba generated $12.4 billion in revenue in its second quarter of fiscal 2019, which ended on September 30. Its revenue rose 54% YoY (year-over-year) in the quarter. Etsy (ETSY), Amazon (AMZN), and JD.com (JD) grew their revenues 41%, 29%, and 25% YoY, respectively, in the comparable quarter. Revenue rose 6.0% YoY at eBay (EBAY) in the period. Continue to Next Part Browse this series on Market Realist: * Part 1 - Exploring Amazon’s Appetite for More Retail Outlets * Part 2 - The Numbers Support Amazon’s Physical Store Push * Part 3 - Why Whole Foods’ Losses May Not Bother Amazon
eCommerce Updates: eBay, JD, and Shopify (Continued from Prior Part) ## Company holding $6.2 billion in cash JD.com (JD) is planning to repurchase up to $1.0 billion of its shares over the next 12 months. The company intends to fund its share repurchase program with its existing cash balance. JD closed the third quarter of 2018, the most recent reported period, with $6.2 billion in cash. JD announced the repurchase program after its stock plunged in 2018 alongside other major Chinese Internet companies amid a slowing domestic economy and grinding trade war with the United States. JD shares plunged about 50% in 2018. Baidu (BIDU) and Alibaba (BABA) shares fell about 35% and 25%, respectively, in 2018. ## Chinese companies line up repurchase programs In addition to JD, the other Chinese Internet companies that have lined up large repurchase programs include Baidu, Alibaba, and Tencent (TCEHY). Baidu announced a $1.0 billion repurchase program in June, and $513 million remained in that program at the end of September. Alibaba is planning to repurchase up to $6.0 billion of shares in the next two years. For its part, Tencent has board authorization to repurchase up to 10% of its outstanding shares. eBay (EBAY) is another ecommerce company that has lined up a generous repurchase program. The company had $4.7 billion remaining on its existing repurchase authorization at the end of September. ## JD’s revenue jumped 25% JD generated $15.3 billion in revenue and made over $400 million in profit in the third quarter of 2018. Its revenue rose 25% year-over-year. Continue to Next Part Browse this series on Market Realist: * Part 1 - Why Morgan Stanley Downgraded eBay * Part 2 - JD Mall’s Restructuring Plans: What You Need to Know * Part 4 - Shopify’s Recent Fundraising: Must-Knows
Could Amazon’s Fourth-Quarter Results Beat Analysts’ Expectations? (Continued from Prior Part) ## EPS expected to be $5.53 In October, Amazon (AMZN) announced it was raising its US and UK workers’ starting wage, effective November 1. Higher wages can boost workers’ morale and productivity. However, they also mean additional costs, which can impact profits. How did Amazon’s bottom line fare in the fourth quarter after the company raised wages? We’ll find out when the company reports its fourth-quarter results. On average, analysts expect the company to report EPS of $5.53. ## EPS exceeded analysts’ expectation last year Amazon made a profit of $1.9 billion in the fourth quarter of 2017, translating to EPS of $3.74 and beating analysts’ consensus EPS estimate of $1.83. Alibaba (BABA) and Etsy (ETSY) had EPS of $1.41 and $0.36, respectively, in the fourth quarter of 2017, whereas eBay (EBAY) and JD.com (JD) posted losses per share of $2.51 and $0.10, respectively. Amazon made $2.9 billion in profit in the third quarter, translating to EPS of $5.75. ## Increased focus on profitability Amazon’s fourth-quarter results are set to come out as the company is focusing on profitability. As we noted recently, Amazon is pushing brands to create product formats that it can sell profitably online. For many years, Amazon has been known for its strategy of prioritizing growth over profits. However, it now appears profitability is taking on new significance at Amazon, which may be necessary considering the company’s rising costs due to wage increases and delivery service expansion to include shipping from Whole Foods Market stores. Continue to Next Part Browse this series on Market Realist: * Part 1 - Could Amazon’s Fourth-Quarter Revenue Beat Analysts’ Expectation? * Part 3 - Amazon Is Losing Ground in a Market It Pioneered * Part 4 - How Amazon Unlocked Its Advertising Potential
The Latest Deals and Strategies at Amazon and Alibaba (Continued from Prior Part) ## Whole Foods isn’t profitable yet According to a recent Wall Street Journal report citing those familiar with the situation at Amazon (AMZN), the company’s Whole Foods business isn’t profitable despite its sales having increased since Amazon took over in 2017 following a $13.7 billion transaction. The lack of profits for Whole Foods can be attributed to Prime discounts, which have hurt the business’s margins. However, given Jeff Bezos’s usual playbook, Whole Foods’ profitability may not be a big priority right now. The Amazon CEO saw the e-commerce giant through years of losses before it began making profits, which have been increasing in recent quarters. Amazon’s profit hit $2.9 billion in the third quarter of 2018 compared to $256 million a year earlier. Alibaba (BABA), eBay (EBAY), and Etsy (ETSY) posted profits of $2.9 billion, $721 million, and $20 million, respectively, in the third quarter of 2018. JD.com (JD) reported a profit of ~$400 million in the same period. ## Using Whole Foods to promote Prime Amazon has been using Whole Foods to try to drive the uptake of its Prime membership program, which could create more profit opportunities for the company down the road. Prime members pay a $119 annual subscription fee and enjoy a range of benefits, including exclusive discounts on items, free express delivery, and video and music streaming services. Amazon disclosed last year that it served over 100 million Prime members globally. The company generated $3.7 billion in subscription services revenue in the third quarter of 2018, with the amount primarily coming from Prime membership fees. Continue to Next Part Browse this series on Market Realist: * Part 1 - Exploring Amazon’s Appetite for More Retail Outlets * Part 2 - The Numbers Support Amazon’s Physical Store Push * Part 4 - What Next for Amazon in India amid New Retail Rules?
eCommerce Updates: eBay, JD, and Shopify (Continued from Prior Part) ## JD Mall reorganized into three groups JD.com (JD) has announced a restructuring plan that will see its main business, JD Mall, split into three groups, the South China Morning Post reported. One of the groups will be responsible for studying customer behaviors and market changes. Another group will be responsible for providing services that satisfy customer demands, likely building on the findings of the first group. The third group will handle everything from infrastructure building to risk management. JD is betting on the restructuring plan to help it achieve quality growth and better position itself to serve customers in an ever-changing business environment. JD is in tight competition with Alibaba (BABA) for control of the ecommerce market in China—its domestic market. Overseas, JD is battling Amazon (AMZN), eBay (EBAY), and a host of other rivals for ecommerce revenue. ## JD’s active customers decreased JD exited the third quarter of 2018 with 305.2 million active customers, down from 313.8 million in the second quarter and marking the first time that the company registered a decline in its active customer base. Alibaba and eBay closed the third quarter with 601 million and 177 million active customers, respectively, both increasing from the previous quarter. Amazon doesn’t disclose its customer metrics. It only said last year that its Prime membership program had attracted more than 100 million subscribers globally. ## JD collaborating with Google JD’s revenue rose 25% year-over-year to $15.3 billion in the third quarter. JD is collaborating with Google (GOOGL) to help accelerate its international expansion. Google owns a small stake in JD, following an investment of $550 million in the Chinese ecommerce giant in June. Continue to Next Part Browse this series on Market Realist: * Part 1 - Why Morgan Stanley Downgraded eBay * Part 3 - How JD Will Fund Its $1.0 Billion Repurchase Program * Part 4 - Shopify’s Recent Fundraising: Must-Knows
Could Amazon’s Fourth-Quarter Results Beat Analysts’ Expectations? ## Fourth-quarter revenue expected to be $71.9 billion Amazon (AMZN) is expected to release its fourth-quarter results on January 24. On average, analysts expect the company to report revenue of $71.9 billion. In October, Amazon set a goal to deliver fourth-quarter revenue of $65 billion–$72.5 billion, suggesting the company may beat analysts’ expectation. ## Upward trend In the fourth quarter of 2017, Amazon’s revenue rose 38.2% YoY (year-over-year) to $60.5 billion, putting it among the fastest-growing large e-commerce companies. Alibaba’s (BABA), JD.com’s (JD), eBay’s (EBAY), and Etsy’s (ETSY) revenue grew 56%, 38.7%, 9.1%, and 23.7% YoY, respectively, in the fourth quarter of 2017, while Groupon’s (GRPN) fell 3.5% YoY. Amazon’s revenue rose 29% YoY to $56.6 billion in the third quarter (ended September), 39% YoY in the second quarter, and 43% YoY in the first quarter. ## Retail, advertising, and cloud businesses driving growth Gains in retail, advertising, and cloud computing have been behind Amazon’s healthy top-line growth recently. In the retail market, for instance, its acquisition of Whole Foods Market has allowed Amazon to expand in the retail food business, enabling the company to capture more household spending. Continue to Next Part Browse this series on Market Realist: * Part 2 - How Amazon’s Wage Hikes Could Affect Its Bottom Line * Part 3 - Amazon Is Losing Ground in a Market It Pioneered * Part 4 - How Amazon Unlocked Its Advertising Potential
Jim Cramer and technician Dan Fitzpatrick examine the charts of some Chinese stocks that could soon be ripe for the picking.