The Problem with Qudian Stock
๐ง๐ต๐ฒ ๐ฃ๐ฟ๐ผ๐ฏ๐น๐ฒ๐บ ๐๐ถ๐๐ต ๐ค๐๐ฑ๐ถ๐ฎ๐ป ๐ฆ๐๐ผ๐ฐ๐ธ
๐ฆ Qudian Stock $QD lost 40% in the last year, before gaining 200%, then losing 40% again. Over the long-term, Qudian is in a deep bear market. Normally, this should not worry value investors since ๐ซ๐ค๐ก๐๐ฉ๐๐ก๐๐ฉ๐ฎ ๐๐จ ๐ฃ๐ค๐ฉ ๐ง๐๐จ๐ . The stock is selling at 0.25X book value today and looks like a deep value stock but is it really that safe?
๐ Qudian recently reported 4th quarter earnings. Revenues were down 58% in 2020 compared to 2019 and net income down 70%. There were lower economic activities and more regulations to explain this. But the good news is that the recovery is happening, the delinquency rate is falling and is now even below its 4Q19 level. However, we need to acknowledge that they are now being more choosy in their loans. This means ๐ก๐๐จ๐จ ๐ง๐๐ซ๐๐ฃ๐ช๐๐จ ๐๐ฃ๐ ๐ฅ๐ง๐ค๐๐๐ฉ๐จ ๐๐ค๐ง ๐ฉ๐๐ ๐๐ค๐ข๐ฅ๐๐ฃ๐ฎ ๐๐ฃ ๐ฉ๐๐ ๐๐ค๐ข๐๐ฃ๐ ๐ฎ๐๐๐ง๐จ.
๐ฐ Qudian maintains a ๐๐ง๐๐๐ฉ ๐๐๐ก๐๐ฃ๐๐ ๐จ๐๐๐๐ฉ, they were able to buyback shares in 2020 and also bought back much of their debt. I've mentioned before that Qudian is trying to do something like Berkshire Hathaway $BRK.B , using their cash to buy other businesses. But most of these businesses are failures for now.
๐ฌ Qudian doesn't look like a stock in which Warren Buffett will invest in but it looks like a stock in which Warren Buffett would invest in but it certainly looks like a stock in which Benjamin Graham would invest in (although he was very sceptical of foreign securities in his times). ๐๐ช๐๐๐๐ฃ ๐๐จ ๐ ๐๐๐๐๐ง ๐๐ช๐ฉ๐ฉ ๐จ๐ฉ๐ค๐๐ .
๐ Qudian is not only trading under its book value but also under its net current asset value (current asset minus total liabilities). This doesn't mean that the market will eventually realize that Qudian is undervalued. Maybe it will forever remain at 0.25X book value. ๐๐๐ ๐๐ค๐ข๐ฅ๐๐ฃ๐ฎ ๐ก๐๐๐ ๐จ ๐๐๐ฉ๐๐ก๐ฎ๐จ๐ฉ๐จ ๐๐ค๐ง ๐ฉ๐๐ ๐๐ช๐ฉ๐ช๐ง๐.
Qudian is still a good investment at current price but without new catalysts, the price will not go up. Therefore, you need to make sure you ๐ฅ๐ง๐ค๐ฉ๐๐๐ฉ ๐ฎ๐ค๐ช๐ง ๐๐ค๐ฌ๐ฃ๐จ๐๐๐, you need to know when to take profits on the stock.
Watch the full video on YouTube:
https://www.youtube.com/watch?v=7lh1j-5F57w&list=UUPO3uUyoXSaFWG-Ldq1mqEQ&index=2
Full analysis of Qudian:
https://ishfaaqpeerally.teachable.com/courses/662813/lectures/31521729
๐ฌJoin my INVESTMENT RESEARCH PARTNERSHIP for all my analysis and research, along with a course for investing for beginners for free๐ฌ
https://ishfaaqpeerally.teachable.com
๐ New to investing? Here's my investing COURSE FOR BEGINNERS with over 150 lectures ๐
https://ishfaaqpeerally.teachable.com/courses/enrolled/721696
๐ฃ๏ธJoin my private investing FACEBOOK GROUP for more ๐ฃ๏ธ
https://www.facebook.com/groups/IshfaaqInvesting/
๐ฌ Join my DISCORD CHAT ๐ฌ:
https://discord.com/invite/t9YvXfU
๐ WEBSITE - Subscribe for Weekly Newsletter ๐:
https://www.ishfaaqpeerally.com/