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Don Dion
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Don Dion (, @DRDInvestments) is the owner and Chief Investment Officer of DRD Investments, LLC, based in Naples, FL. and Williamstown, MA., a family office focused on managing a long/short hedge fund, real estate assets and various other financial assets for the Dion family.... More
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  • Quiet Period Expirations For SIEN, SHLX, BOOT On Monday, 11.24
    • Busy Monday for SIEN, SHLX, BOOT investors -- the quiet periods for all three expire Monday, 11.24.
    • Studies show returns of 2%-6% during this event period, particularly if coverage is initiated by more than one underwriter/analyst.
    • Impressive underwriting teams for these newly public stocks could give all three a strong boost.

    Disclosure: The author is long SIEN, SHLX, BOOT.

    Tags: SIEN, SHLX, BOOT
    Nov 21 11:20 AM | Link | Comment!
  • Follow Up: Lockup Expiration Heritage Insurance Is Monday, 11.24
    • HRTG's lock up period will end on November 24, 2014; at this point, hundreds of HRTG's original shareholders will be allowed to sell their HRTG stock for the first time.
    • HRTG stock recently hit a new high; long time insiders, holding restricted shares numbering over 23 million, could be itching to sell.
    • The supply shock could cause a potential short opportunity; academic research and the studies of our own firm support this possible outcome.
    • Full analysis here.

    Disclosure: The author is short HRTG.

    Tags: HRTG
    Nov 20 7:37 PM | Link | Comment!
  • With Opening Of Shanghai-Hong Kong Stock Connect, A Pretty Picture For Jumei International

    On November 17, 2014, a new trading link will launch that connects buyers and sellers in Shanghai and Hong Kong and opens up an estimated $2 trillion Chinese mainland equity market.

    This should provide a great benefit to many Chinese companies that are listed--Jumei International (NYSE:JMEI) is one of these.

    What Is The Shanghai-Hong Kong Stock Connect?

    The Shanghai-Hong Kong Stock Connect will make Shanghai 'A' shares available to retail, institutional and the global investing community. Shares will be traded on the Hong Kong Stock Exchange. At the same time, investors from mainland China will have the ability to use the Shanghai Stock Exchange to trade Hong Kong 'H' shares. Presently, capital markets in domestic China can only be directly invested in by institutional investors who have authority to do so by the Chinese government. With a $5.5 trillion combined market capitalization, there will definitely be an increase in trading after this unprecedented move.

    Positive Market Reaction

    Already, there have been positive reactions to this development. The Shanghai Composite Index is trading 23 percent higher than it was in the first quarter of 2014.

    (click to enlarge)


    Some estimates indicate that the Stock Connect trading scheme could increase the average daily value of trading in Hong Kong by 35 to 40 percent in 2015. At the same time, it will open up a channel to some $8 trillion worth of private wealth by Chinese savers that is currently not invested in stocks.

    Overview of Jumei International

    Jumei is an online retailer in the People's Republic of China that provides beauty products, lifestyle products and apparel through its website

    Its IPO was introduced on the New York Stock Exchange on May 16, 2014 and raised a total of $429.9 million for the company. The 11.14 million shares of available stock were initially priced at $22 per share and ended the day with a positive close at $24.18. Since then, shares of JMEI have reached a mid-August high of $39.45 but have since pulled back to the $24 level.

    (click to enlarge)


    Outlook For Upcoming Results

    On November 19, 2014, Jumei is expected to report earnings for its third fiscal quarter that ended September of 2014. Analysts are forecasting an EPS number of $0.13. In August, the company came in with its unaudited report for the second quarter at an EPS of $0.13, higher than the expected $0.11 EPS forecast. Net revenues increased by 41.9 percent to $154.4 million, exceeding the $108.8 million figure from the second quarter in 2013. The company also saw an increase in the number of total orders. At 11 million, that figure increased by 39.2 percent over the orders figure of about 7.9 million in 2013.


    As in most markets, Jumei does have some competition. Vipshop (NYSE:VIPS)--conducting business at the market category for heavily discounted merchandise. With its recent $133 million acquisition of Lefeng, an online seller of discounted cosmetics, it's increasingly clear the company has plans to move into the beauty and personal care markets.

    Conclusion: A Pretty Picture For JMEI Shareholders

    These figures paint a bright future for Jumei. Increased interest in the sector, combined with the opening of the Shanghai-Hong Kong Stock Connect, should bring many more eyeballs and investing dollars in front of the company.

    China's rapidly growing middle class is only expected to expand; the interest in personal care and beauty is expected to rise in correlation in the next few years. Estimates for the value of personal care and beauty in China are listed at $34 billion by next year.

    We see the current dip in JMEI's price as a potential buying opportunity.

    We encourage readers wishing to join the discussion on JMEI and VIPS to click the +Follow and/or +Get real time alerts buttons above the title of this article.

    Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

    Tags: VIPS, JMEI, long-ideas
    Nov 17 9:59 AM | Link | Comment!
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