The company conducts business under
Consumer Cyclical sector and is part of
Internet Retail industry.
The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Vipshop Holdings has an asset utilization ratio of 543.19 percent. This connotes that the company is making $5.43 for each dollar of assets. An increasing asset utilization means that Vipshop Holdings is more efficient with each dollar of assets it utilizes for everyday operations.
Investing in Vipshop Holdings, just like investing in any other equity instrument, is characterized by a strong risk-return correlation. High risks mean high returns and low risk means lower expected returns. Risk management is the act of identifying and assessing the potential risk and developing strategies to minimize these risks and earn maximum possible profits while holding Vipshop Holdings along with other instruments in the same portfolio. Using conventional
technical analysis and
fundamental analysis to select individual securities into a portfolio complements risk management and adds value to overall investors' investing strategies.
Sophisticated investors, who have witnessed
many market ups and downs, anticipate that the market will even out over time. This tendency of Vipshop Holdings' price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Vipshop Holdings. Your research has to be compared to or analyzed against Vipshop Holdings' peers to derive any actionable benefits. When done correctly, Vipshop Holdings' competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in Vipshop Holdings.
How important is Vipshop Holdings's Liquidity
Vipshop Holdings
financial leverage refers to using borrowed capital as a funding source to finance Vipshop Holdings Limited ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Vipshop Holdings financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Vipshop Holdings' owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Vipshop Holdings' financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Vipshop Holdings's total debt and its cash.
Vipshop Holdings Gross Profit
Vipshop Holdings Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Vipshop Holdings previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Vipshop Holdings Gross Profit growth over the last 10 years. Please check Vipshop Holdings'
gross profit and other
fundamental indicators for more details.
Vipshop Holdings Correlation with Peers
Investors in Vipshop can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Vipshop Holdings Limited. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Vipshop Holdings and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Vipshop is related in some way. The cells in the table are color-coded to highlight significantly positive and negative relationships. Each cell shows the correlation between one pair of equities and can be used to run pair trading strategies or create efficient portfolios with
your current brokerage. Please check
volatility of Vipshop for more details
Going after Vipshop Financials
We consider Vipshop Holdings somewhat reliable.
Vipshop Holdings owns Efficiency Ratio (i.e., Sharpe Ratio) of 0.0435, which indicates the firm had 0.0435% of return per unit of risk over the last 3 months. Our standpoint towards measuring the volatility of a stock is to use all available market data together with stock-specific
technical indicators that cannot be
diversified away. We have found twenty-seven
technical indicators for Vipshop Holdings, which you can use to evaluate the future volatility of the company. Please validate Vipshop Holdings Coefficient Of Variation of 1176.54,
semi deviation of 3.0, and Risk Adjusted Performance of 0.1078 to confirm if the risk estimate we provide is consistent with the expected return of 0.15%.
Vipshop Holdings is getting out of control
Latest semi variance is at 8.99. Vipshop Holdings shows above-average downside volatility for the selected time horizon. We advise investors to inspect Vipshop Holdings further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Vipshop Holdings future alpha. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Vipshop Holdings' stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Vipshop Holdings' stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.
Our Conclusion on Vipshop Holdings
While many of the other players within the internet retail industry are still a little expensive, even after the recent corrections, Vipshop Holdings may offer a potential longer-term growth to retail investors. The bottom line, as of the 3rd of September 2022, our analysis shows that Vipshop Holdings follows the market closely. The enterprise is
undervalued and projects
low chance of bankruptcy for the next 2 years. Our present 90 days Buy-Hold-Sell recommendation on the enterprise is
Buy.
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Vlad Skutelnik is a Macroaxis Contributor. Vlad covers stocks, funds, cryptocurrencies, and ETFs that are traded in North America, focusing primarily on fundamentals, valuation and market volatility. He has many years of experience in fintech, predictive investment analytics, and risk management.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Vlad Skutelnik do not own shares of Vipshop Holdings Limited. Please refer to our
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