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Steve Hach is the Senior Editor at ValuEngine.com, a Newtown, Pennsylvania-based stock valuation and forecast service. ValuEngine utilizes Ivy League financial research as the basis for its coverage of more than 7000 US, Japanese, and Canadian, and other foreign stocks. Hach utilizes... More
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  • Chinese Drug Store Giant Nepstar Down More than 20%,npd,$npd 0 comments
    Nov 18, 2010 2:17 PM | about stocks: NPD
    Go to ValuEngine.com
    November 18, 2010
    ATTENTION Advanced Investors and Finance Professionals:
    If you are reading this you should download ValuEngine Institutional Software to see how VE’s powerful quantitative tools can increase your productivity and effectiveness.

    Seeking Alpha Readers should check out our Seeking Alpha VE Investment App HERE

    Not a Star

    Chinese Drug Store Giant Nepstar Down More than 20%

     ValuEngine Forecast Model Market Neutral Portfolio subscribers got a nice surprise this morning due to the strong performance of short-side selection China Nepstar (NPD)China Nepstar is China's largest retail drugstore chain based on the number of directly operated stores.

      Our Forecast Model selected NPD as a short due to its poor short-term forecast return figures last Friday.  IT was included in the portfolio sent to subscribers on Tuesday morning.  Then, yesterday morning China Nepstar reported Q3 net income that was significantly below Q3 2009 figures.  The resulting sell off took @ 23% off the shares.

      Our models have since re-calculated China Nepstar's valuation and forecast figures.  ValuEngine has issued a HOLD recommendation for China Nepstar on Nov. 18, 2010. Based on the information we have gathered and our resulting
    research, we feel that China Nepstar has the probability to ROUGHLY MATCH average market performance for the next year. The company exhibits ATTRACTIVE expected EPS growth and company size, but UNATTRACTIVE momentum and 5-year annualized return.

      Even with yesterday's hair cut, based on available data as of Nov. 18, 2010, we believe that NPD should be trading at $3.31. This makes NPD 19.81% overvalued. "Fair Value" indicates what we believe the stock should be trading at today if the stock market were perfectly efficient and everything traded at its true worth. For NPD, we base this on actual earnings per share (EPS) for the previous four quarters of $0.05, forecasted EPS for the next four quarters of $0.13, and correlations to the 30- year Treasury bond yield of 3.92%.

      Subscribers can check out the latest figures on China Nepstar from our models HERE.

    Seeking Alpha Readers should check out our Seeking Alpha VE Investment App HERE

    For more on the VE Forecast 22 Market Neutral Strategy Newsletter Portfolio, Click the Logo Below

     

     

    Market Indices Data
      Latest Change YTD
    Dow Jones
         
    NASDAQ Composite
         
    Russell 2000
         
    S&P 500
         

     

    ValuEngine Market Overview
    Summary of VE Stock Universe
    Stocks Undervalued
    56.55%
    Stocks Overvalued
    43.45%
    Stocks Undervalued by 20%
    25.53%
    Stocks Overvalued by 20%
    15.87%

     

    ValuEngine Sector Overview
    Sector Change MTD YTD Valuation Last 12-MReturn P/E Ratio
    Basic Materials 0.72% 0.92% 19.72% 12.06% overvalued 50.42% 32.73
    Oils-Energy 0.29% 2.68% 8.87% 9.22% overvalued 34.99% 41.78
    Multi-Sector Conglomerates -0.12% 0.63% 16.13% 3.80% overvalued 27.32% 32.18
    Auto-Tires-Trucks 0.96% 3.36% 38.42% 0.74% overvalued 39.63% 34.14
    Transportation 0.22% -0.49% 17.28% 0.12% overvalued 23.44% 39.18
    Finance -0.12% -0.18% 12.82% 0.08% undervalued 16.34% 29.30
    Retail-Wholesale 0.55% 2.35% 13.13% 0.92% undervalued 45.52% 25.16
    Utilities 0.22% -0.29% 4.18% 0.93% undervalued 15.06% 26.89
    Industrial Products 0.23% 1.21% 14.23% 1.50% undervalued 23.38% 26.47
    Consumer Staples 0.36% 1.38% 5.42% 1.62% undervalued 14.00% 21.84
    Aerospace 1.01% -2.30% 12.43% 4.29% undervalued 21.88% 18.91
    Computer and Technology 0.03% 0.39% 19.62% 4.84% undervalued 26.34% 39.24
    Business Services 0.11% 1.03% 5.69% 5.08% undervalued 14.22% 28.48
    Consumer Discretionary 0.41% 0.45% 15.56% 5.73% undervalued 20.75% 29.80
    Construction -0.11% 1.43% -0.14% 10.93% undervalued 0.48% 37.22
    Medical -0.10% 1.06% 10.58% 11.53% undervalued 16.31% 33.07

     

     
     
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    Disclosure: no positions

    Disclosure: no positions
    Stocks: NPD
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