Personal Finance

Why Bitauto Holdings Stock Lost 18.4% in February

BITA Chart

What happened

Bitauto Holdings (NYSE: BITA) stock lost 18.4% in February, according to data from S&P Global Market Intelligence .

BITA data by YCharts

So what

Double-digit sell-offs on Bitauto stock last month seem to have been at least partially tied to downside momentum that started in January. Substantial sell-offs kicked off on Jan. 26 and corresponded with the announcement that there would be changes to the company's board of directors. Bitauto published a press release stating that Rob Huting will be replacing Joseph Luppino on the company's board. Luppino currently serves as the vice president of Cox Automotive, Inc., overseeing international mergers and acquisitions.

An illustrated car icon with a wireless logo.

Image source: Getty Images.

Bitauto has a relatively small market cap at roughly $2.3 billion and tends to see volatile pricing swings from news and ratings coverage -- so it's possible that the market is reading into the personnel change and finding unfavorable implications. The stock's performance was also affected by share price fluctuations for its Yixin subsidiary -- an online-based auto-financing company that Bitauto owns a 47% stake in.

Now what

Bitauto stock gained roughly 68% last year , but its share price is flat year to date after February's sell-offs and a post-earnings rebound in March. The company's advertising business probably won't be the big revenue driver that it's been in the past, but its transactions segment is still growing at a rapid clip.

Shares will also probably continue to move in relation to Yixin's valuation, and both companies look poised to benefit from tailwinds in the Chinese economy. Bitauto trades at roughly 13 times this year's earnings estimates and stands as an attractive buy at current prices.

10 stocks we like better than Bitauto Holdings

When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Bitauto Holdings wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of March 5, 2018

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

BITA

Other Topics

Stocks

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More