LJ International Inc (NASDAQ: JADE) designs, manufacturs and distributes its own jewelry brand called ENZO. JADE sells its jewelry through jewelry stores, department stores and its own stores. JADE has 94 stores in mainland China, Hong Kong and Macau. Amid the current economic environment. It also wholesales to North America and for 2008, the North America markets account for 51% of its total sales.
JADE's main competitor is Fuqi International Inc (NASDAQ: FUQI), which is also located in China. FUQI also designs precious metal jewelry and sells a range of luxury goods in China such as platinum and Karat gold chains. FUQI has 69 retail counters and stores in China. The stocks for jewelry manufacturers and sellers have been beaten down due to economc recessionary environment. However, on July 22, 2009, JUQI announced that it expected Q2 earning would be at or above the high-end of earning estimates of $0.27-$0.32. The average consensus is $0.30. But at the same time, stock price falls because FUQI planned for more stock offering. But today, the stock recovers signicantly.
My speculative trade is JADE. If FUQI can beat expected Q2 earning, JADE may be able to do the same. Of course other investors have the same thought and bid up JADE to $2.07 (up 7.27%) at this writing or up about 10% for the last 2 days. JADE is expected to announce Q2 earning on August 5. If the stock falls back to around $1.90, I will buy the stocks as a speculative trade ahead of earning announcement. There is no Q2 earning estimates for JADE since JADE has no analyst coverage. Therefore, if JADE could beat Q1 profit of $0.1, the stock may advance nicely.
Again , this is a highly risky speculative short-term trade. But if you are a risk taker, JADE may worth the risk.