LightInTheBox Holding

01/09/2014 5:00 am EST

Focus: GLOBAL

Paul Goodwin

Emerging Markets Specialist and Analyst, Cabot Heritage Corporation

 

There is no rational way to figure out which emerging market stock will come out on top a year from now. Emerging markets are just too volatile for long-term projections, cautions Paul Goodwin, editor of Cabot China & Emerging Markets Report.

Nevertheless, I'm picking a stock based almost entirely on its story, which I think has the potential to be huge. The company is LightInTheBox Holding (LITB) and it's a Chinese company that operates a global online retail site.

LightInTheBox offers customers around the world a chance to buy customized products (like wedding gowns) direct from factories at low prices.

The company's Web sites are available in 27 languages and are reachable by 80% of global Internet users. The company has been growing revenue fast (98% growth in 2011, 72% in 2012) and turned a profit in Q4 2012 and Q1 2013.

LITB has been in a downtrend since its August earnings report disappointed traders, falling from a high of $23 to around $8 in recent trading.

The company announced, in December, a share repurchase program of up to $20 million for its American Depositary Shares to run through December 2014.

There's no doubt that there's risk in LITB, but the potential is also huge. And, at current levels, it's a reasonable buy; just keep your stops handy.

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