Stock prices alone dont tell the entire story.
stock prices just represent the equity portion of ownership. Debt holders are also a form of owners who can collect at liquidation before shareholders in the worst case scenario.
The opposite of debt liabilities is excess cash on the balance sheet.
While debt would make a balance sheet look worse, cash does the opposite.
JD has excess cash on the balance sheet. 33b in cash vs 9.57b in debt.
The extra cash makes the stock price even cheaper than it looks.
JD isnt the only one. There are other Chinese stocks with attractive balance sheets and beaten up prices. The current slowdown and sell off has crushed most of Chinese stocks. There is real geopolitical and economic risk right now in china. But the lesson here is learning to read the financials and using this information in decision making.
When looking at stocks, dont ignore the balance sheet. You will find hidden treasure sometimes, and other times you may find rot to avoid.
stock prices just represent the equity portion of ownership. Debt holders are also a form of owners who can collect at liquidation before shareholders in the worst case scenario.
The opposite of debt liabilities is excess cash on the balance sheet.
While debt would make a balance sheet look worse, cash does the opposite.
JD has excess cash on the balance sheet. 33b in cash vs 9.57b in debt.
The extra cash makes the stock price even cheaper than it looks.
JD isnt the only one. There are other Chinese stocks with attractive balance sheets and beaten up prices. The current slowdown and sell off has crushed most of Chinese stocks. There is real geopolitical and economic risk right now in china. But the lesson here is learning to read the financials and using this information in decision making.
When looking at stocks, dont ignore the balance sheet. You will find hidden treasure sometimes, and other times you may find rot to avoid.