JD.com: What’s Your Competitive Advantage?

  • JD.com had a productive year so far, but their performance is still average in their competitive industry.
  • A global company with such potential should have higher revenue.
  • Is JD a quality long-term investment for you?

JD (JD.com Inc., $33.16) is China’s second largest e-commerce retail website and as affordable, the stock price is, many investors are anxious for better financial results.

Fast Analysis

JD has a history of low GPM (gross profit margins) ranging from 11% to 14% from 2014 to 2017. Leading corporations that have a higher competitive advantage may have a percentage that lies in 20% or above such as BABA (Alibaba Group Holdings) at 57% and AMZN (Amazon.com Inc.) at 23%.

Investors are also mindful of JD’s earnings history. Limited or erratic growth in earnings may be a sign of the company’s poor management of supply- also known as “boom and bust”.

Image Credit

Though investors do not solely use GPM’s or earnings as a sole deal-breaker for investing, a company that shows consistent growth in these areas is a positive sign of long-term durability.

Read: Honda VS. Toyota- Which Stock Is The Better Buy?

Recent Acquisitions, Mergers & Investments

JD had a busy summer with the large partnership made with GOOGL (Google/Alphabet) and acquisition of a large european fashion brand, Finish Line.

JD also partnered with L. Catterton Asia for a convertible note investment of $175 million in SECO (Secoo Holding Limited), one of the world’s leading online luxury brand. This joint venture was made to further expand revenue and audience in the online retail market.

Related: Alibaba Group Holdings Ltd: The International Powerhouse

Image Credit

On the other hand, analysts such as Zack’s are currently listing JD as a “strong sell” due to the low annualized return rate below 5%.

Should investors wait until the trade dispute subsides between Asia and the United States? JD is taking immediate action through the right investments to broaden their audience.

Please see About Me & Disclaimer for additional information about Black Tea.

Information Attainted:

Nasdaq.com, Zacks.com, Msn.com/Money, CNBC.com

Advertisements

Tariffs: What Are They? How Are They Affecting My Portfolio?

What are tariffs? How do they affect the stock market and investors?

It’s important to get a simple understanding of how tariffs are affecting the stock market and our economy. Tariffs are hurting many stock investors and it’s important to get an understanding of what they are doing.

A Tariff is a tax or duty to be paid on a particular class of imports or exports.

Simply put, a tariff is a tax on an import/export. When the money is collected they are known as duties or levies. Tariffs are usually charged as a percentage of a “transaction price”. These percentages vary from country to country. Analysis done by Greg Daco of Oxford University, discovered U.S., Japan, Europe and Canada charge a tariff percentage of 3.1% and below whereas Mexico and China reach to 4%.

Read: How Entrepreneurs Can stay Ahead Of A Slow Growing Economy.

Tariffs raise our government revenue and decrease pressure on our competitors. However, U.S. and China are two of world’s two largest economies and economists are declaring that China can stand to “hold their breath longer” in the trade-off than America.

The biggest concern lies with our fragile economy and corporate businesses. The “tax war” is effecting some of America’s most important businesses; soybeans farms, automobile manufacturers, steel and aluminum shipments, etc.

Rod Sides of Deloitte (U.S.) recently stated,

Consumers are feeling good, but if they see prices start going up, there could be a backlash. The average consumer hasn’t yet internalized what the tariffs mean to them and haven’t seen the prices rise.

Read: Bearish Behavior: How To React When Your Portfolio Is Plunging.

The tariffs can contribute to price changes of imports/exports which may contribute to the delay of corporate investments and new projects. This has investors concerned for price changes on the stock markets and America’s wealth. The tariffs don’t only effect our portfolios as investors, but this also affects the global economy. The world is watching every move President Trump makes and how he responds to China. The pressure is on.

Please see About Me and Disclaimer for additional information about Black Tea.

Information Attained:

Finance.Yahoo.com, InvestingAnswers.com, CBSNews.com