February 22, 2012 -- Updated January 12, 2012 02:56 HKT
LJ International, Inc. (NASDAQ:JADE) Upgraded
LJ International, Inc. (NASDAQ:JADE) has been Upgraded to a Strong Buy at Heffernan Capital Management with a 2013 price target of $4 issued today by Shayne Heffernan.
LJ International Inc. (LJI), incoroprated on January 30, 1997, is a vertically integrated company that designs, brands, markets, distributes and retails a range of fine jewelry. While the Company specializes in the colored jewelry segment, it also offers high-end pieces set in yellow gold, white gold or sterling silver and adorned with colored stones, diamonds, pearls and precious stones. Its product lines incorporate all categories sought by retailers, including earrings, necklaces, pendants, rings and bracelets. The Company conducts its jewelry retail business through the ENZO brand in the Asia Pacific region, with the primary focus in the China market. It operates in two business segments: manufacture and wholesale of jewelry products, and retail of jewelry products.
The Company also owns certain commercial and residential properties located in Hong Kong, which are held primarily for lease. The Company’s primary wholesale marketing focus has been in North America where it has sold directly to certain customers that need specialized product development services, and through a marketing relationship with International Jewelry Connection for those customers that need service and training. The Company specialize in a range of colored gemstones ranging from amethyst, aquamarine and peridot to tanzanite and tourmaline. As of December 31, 2010, the Company had 133 ENZO retail chain in China. The Company has established a facility in China that performs stone cutting and polishing and jewelry production. The facility is located in the city of Shenzhen in Guangdong Province, China.
The Company competes with Chow Tai Fook, Chow Sang Sang, Tse Sui Luen, Luk Fook, Laofengxiang, Chaohongji, Laomiao, Tiffany, Cartier and Bulgari.
Consensus Estimates Analysis
| # of Estimates | Mean | High | Low | 1 Year Ago | |
|---|---|---|---|---|---|
| SALES (in millions) | |||||
| Quarter Ending Mar-12 | 1 | 50.50 | 50.50 | 50.50 | – |
| Quarter Ending Jun-12 | 1 | 54.60 | 54.60 | 54.60 | – |
| Year Ending Dec-12 | 1 | 233.00 | 233.00 | 233.00 | 211.60 |
| EARNINGS (per share) | |||||
| Quarter Ending Mar-12 | 1 | 0.02 | 0.02 | 0.02 | – |
| Quarter Ending Jun-12 | 1 | 0.03 | 0.03 | 0.03 | – |
| Year Ending Dec-12 | 1 | 0.16 | 0.16 | 0.16 | 0.73 |
| LT Growth Rate (%) | 1 | 34.00 | 34.00 | 34.00 | 35.00 |
Sales and Earnings Figures in U.S. Dollars (USD)
Valuation Ratios
| Company | Industry | Sector | S&P 500 | |
|---|---|---|---|---|
| P/E Ratio (TTM) | 5.67 | 28.48 | 10.12 | 19.73 |
| P/E High – Last 5 Yrs. | 85.63 | 38.31 | 43.45 | 100.59 |
| P/E Low – Last 5 Yrs. | 5.86 | 16.07 | 10.00 | 12.63 |
| Beta | 1.99 | 0.82 | 0.95 | 1.18 |
| Price to Sales (TTM) | 0.35 | 1.16 | 0.70 | 2.20 |
| Price to Book (MRQ) | 0.52 | 2.71 | 1.38 | 3.70 |
| Price to Tangible Book (MRQ) | 0.40 | 3.45 | 1.64 | 6.46 |
| Price to Cash Flow (TTM) | 3.63 | 12.79 | 5.94 | 19.17 |
| Price to Free Cash Flow (TTM) | – | 62.52 | 9.41 | 23.47 |
| % Owned Institutions | – | – | – | – |
Dividends
| Company | Industry | Sector | S&P 500 | |
|---|---|---|---|---|
| Dividend Yield | – | 1.51 | 1.13 | 2.13 |
| Dividend Yield – 5 Year Avg. | 0.00 | 1.38 | 1.30 | 2.37 |
| Dividend 5 Year Growth Rate | – | 14.62 | -0.22 | -0.96 |
| Payout Ratio(TTM) | – | 87.58 | 18.41 | 32.16 |
Growth Rates
| Company | Industry | Sector | S&P 500 | |
|---|---|---|---|---|
| Sales (MRQ) vs Qtr. 1 Yr. Ago | 35.29 | 9.25 | 7.84 | 10.62 |
| Sales (TTM) vs TTM 1 Yr. Ago | 32.37 | 6.75 | -0.48 | 10.55 |
| Sales – 5 Yr. Growth Rate | 7.12 | 16.63 | 9.94 | 7.95 |
| EPS (MRQ) vs Qtr. 1 Yr. Ago | -106.96 | 52.24 | -526.08 | 39.34 |
| EPS (TTM) vs TTM 1 Yr. Ago | -18.28 | – | – | – |
| EPS – 5 Yr. Growth Rate | 17.93 | 12.19 | 4.66 | 6.78 |
| Capital Spending – 5 Yr. Growth Rate | 18.18 | 8.59 | 0.26 | 4.34 |
Financial Strength
| Company | Industry | Sector | S&P 500 | |
|---|---|---|---|---|
| Quick Ratio (MRQ) | 0.63 | 1.48 | 1.14 | 0.76 |
| Current Ratio (MRQ) | 2.55 | 2.12 | 1.40 | 1.12 |
| LT Debt to Equity (MRQ) | 0.69 | 24.39 | 61.20 | 108.83 |
| Total Debt to Equity (MRQ) | 21.69 | 31.80 | 101.26 | 147.61 |
| Interest Coverage (TTM) | 16.28 | 2.18 | 0.33 | 26.39 |
Profitability Ratios
| Company | Industry | Sector | S&P 500 | |
|---|---|---|---|---|
| Gross Margin (TTM) | 46.12 | 34.56 | 11.38 | 35.56 |
| Gross Margin – 5 Yr. Avg. | 31.14 | 37.50 | 24.05 | 34.50 |
| EBITD Margin (TTM) | 11.16 | – | – | – |
| EBITD – 5 Yr. Avg | 7.57 | 11.58 | 10.36 | 20.07 |
| Operating Margin (TTM) | 8.95 | 7.81 | 0.54 | – |
| Operating Margin – 5 Yr. Avg. | 5.37 | 8.93 | 5.64 | 15.99 |
| Pre-Tax Margin (TTM) | 9.94 | 7.49 | 0.42 | 17.17 |
| Pre-Tax Margin – 5 Yr. Avg. | 4.96 | 8.80 | 5.48 | 15.54 |
| Net Profit Margin (TTM) | 7.49 | 4.80 | -0.69 | 13.05 |
| Net Profit Margin – 5 Yr. Avg. | 3.93 | 5.34 | 3.77 | 11.54 |
| Effective Tax Rate (TTM) | 24.62 | 29.02 | 19.69 | 23.76 |
| Effecitve Tax Rate – 5 Yr. Avg. | 20.66 | 38.05 | 32.89 | 25.33 |
Efficiency
| Company | Industry | Sector | S&P 500 | |
|---|---|---|---|---|
| Revenue/Employee (TTM) | 68,563 | 27,128,726 | 154,576,661 | 819,076 |
| Net Income/Employee (TTM) | 5,136 | 1,568,406 | -1,033,960 | 109,469 |
| Receivable Turnover (TTM) | 5.61 | 21.33 | 19.09 | 10.28 |
| Inventory Turnover (TTM) | 0.69 | 4.07 | 4.49 | 8.92 |
| Asset Turnover (TTM) | 0.86 | 1.00 | 0.45 | 0.64 |
Management Effectiveness
| Company | Industry | Sector | S&P 500 | |
|---|---|---|---|---|
| Return on Assets (TTM) | 6.45 | 6.26 | 0.99 | 7.36 |
| Return on Assets – 5 Yr. Avg. | 3.92 | 8.02 | 3.77 | 6.61 |
| Return on Investment (TTM) | 10.49 | 9.75 | 1.41 | 9.70 |
| Return on Investment – 5 Yr. Avg. | 6.85 | 13.86 | 6.88 | 8.81 |
| Return on Equity (TTM) | 10.34 | 11.92 | 2.72 | 23.74 |
| Return on Equity – 5 Yr. Avg. | 6.99 | 18.17 | 9.82 | 21.08 |
Shayne Heffernan
Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.
Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services. www.livetradingnews.com
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