E Commerce China Dangdang Inc (NYSE:DANG) Shares Surges on Up gradation from Piper Jaffray on Pullback

E Commerce China Dangdang Inc (NYSE:DANG) Shares jumped after Piper Jaffray upgraded the stock to "Overweight" from "Neutral" on Monday. Analysts at Piper Jaffray raised its investment opinion on shares of the company on Monday and upgraded its rating for the stock from "Neutral" to "Overweight". Piper Jaffray analysts commented" While DANG shares are down 26% since reporting Dec. qtr earnings Mar. 9 on heightened competition impacting margins, we see this as a buying opportunity for long-term investors. eCommerce in China remains one of the top global growth opportunities over the next decade, and Dangdang is well positioned to capitalize. Competition for eCommerce customers in China is getting more intense, which has caused customer acquisition costs to rise. Dangdang is taking a page out of Amazon’s book by shifting spending from traditional marketing to improving the shopping experience, which we believe over time is the right strategy to drive rev growth. Lowering our PF op. income ests. to be inline with the Street while maintaining our rev ests." They also said that "Despite lowering PF operating inc ests (inline with Street), we are upgrading shares given we remain confident in the rev growth opportunity," and then said that "AMZN investors have been rewarded for being patient and focusing on rev growth; we think DANG shareholders will be too." On March 9, Chinese ecommerce leader Dangdang reported broadly in line December quarter results and March quarter guidance. December quarter revenue and operating income came in at Rmb710 million and Rmb8.5 million. Revenue grew 59% year over year to Rmb107.7 million vs. consensus of Rmb106.6 million. Media revenue was Rmb541.4 million, up 42% year over year and General Merchandise revenue was Rmb155.9 million, up 151% year over year.  Marketplace revenue was Rmb13.6 million, up221% year over year. The company noted the decrease in gross margins to 22% in 4Q10 from 25% in 3Q10 was largely due to the recognition of advertising and promotion costs in 4Q. For 1Q11, the company is guiding revenue of Rmb673–681 million (up 50–52% year over year). The company noted that it expects the growth trend for both Media and General Merchandise to continue going forward. Shares of the company jumped $2.21 or $11.69% and closed at $21.12 on volume of 4.02 million shares traded. The stock has 52 week range of $18.76-$36.40. The market capital of the stock stands at $330.36 million with P/E of 930.81. E-Commerce China Dangdang Inc. (Dangdang) is a holding company. It is a business-to-consumer (B2C), e-commerce Company in the People's Republic of China. Disclaimer: The assembled information distributed by epicstockpicks.com is for information purposes only, and is neither a solicitation to buy nor an offer to sell securities. Epicstockpicks.com does expect that investors will buy and sell securities based on information assembled and presented herein. EpicStockPicks.com will not be responsible in any way for or accept any liability for any losses arising from an investor's reliance on or use of information obtained from our website or emails. PLEASE always do your own due diligence, and consult your financial advisor.
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