In case nobody has said anything to you about it, chill out. We are not on the brink of World War III. It makes for a great headline and fantastic click-bait. But emotionally driven headlines and articles never made any investor a dime. It’s usually the ones that manage their emotions the best which end up finding their way to profits. While the weekend brough its share of gloom and doom, I’m here to bring a little bit of sunshine to your Monday morning.
It may seem like a bold statement to come out and give you a Bull of the Day ahead of Monday’s open, but on the contrary, it could be the perfect time to load into a stock like this. I’m talking about a Zacks Rank #1 (Strong Buy), JD.com (JD - Free Report) . For the uninitiated, JD.com operates as an e-commerce company and retail infrastructure service provider in the People's Republic of China. It operates in two segments, JD Retail and New Businesses. If Alibaba (BABA - Free Report) is the Amazon (AMZN - Free Report) of China, then consider JD as the eBay (EBAY - Free Report) . JD is also arguably Alibaba’s largest competitor.
The most obvious reason to investigate a stock like JD.com is the easing of tensions between the US and China. The trade war has raged on for many months but the last few weeks have seen vast improvement. Phase One is done and now the superpowers are looking forward to the next round of talks and the next agreement. This obviously bodes well for oversold Chinese stocks.
The other big reason for taking a closer look here is the recent earnings estimate revisions coming in to the upside. Over the last thirty days, analysts have really been pushing up their earnings estimates for the stock. Current year estimates have risen from 95 cents to $1.06 for the current year, while next year’s number has popped up from $1.22 to $1.47.
Those bullish earnings estimate revisions, along with easing of tensions between the US and China, have helped move the stock along nicely. JD.com traded under $28 in early October. Since then, the stock has staged a dramatic rally, closing a penny shy of $38 into the closing bell last Friday. That’s a move of over 35% in about three months.
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