Should you buy JD stock? (March 2024)

Published first at https://www.3minutebreakdowns.com JD.com stock analysis. Ticker: $JD This is one of the cheapest stocks on the market. Chinese e-commerce company JD.COM has a current market value of $44.5 billion dollars despite doing over $150 billion in annual sales. And JD also has 10 billion of cash and 28 billion of investments on its balance sheet. Account for 11 billion of long term debt and the total enterprise value is under 18 billion. Considering JD reported over 3 billion of net income last year and almost 6 billion of free cash flow, the stock is valued at under 14 times earnings and only 3 times free cash flow. Such a cheap valuation usually only applies to companies in terminal decline but that doesn’t apply to JD. Revenues grew 4% last year and 10% in 2022. Meanwhile, JD management is aggressively returning capital to shareholders. The company declared an annual dividend of 76 cents a share which represents a yield of 2.7%. And the company plans to buy back $3 billion dollars worth of stock. That would reduce shares outstanding by more than 7% and help to boost earnings per share. Of course, there are reasons why JD stock is so cheap. The most obvious relate to China which is experiencing an ongoing property slump. And China’s capital rules mean that investors in Chinese ADR shares don’t actually own shares of the business. Chinese ADR shares represent a holding company, based in the Cayman Islands, which has a contractual right to profits. This raises the risk that the Chinese government could one day cancel that agreement putting shareholders in a desperate position. #stocks #investing #jdstock #3mb #stockstobuy