"JD.Com is one of the most undervalued stocks in recent years.”

Many people aren’t familiar with Danial Jiwani. He is the author of Take Stock In This, which readers say is “the best book on investing since The Intelligent Investor. He is sometimes referred to as “the modern Ben Graham.”

One of the stocks Jiwani is bullish on is the Chinnese e-commerce giant JD.com. Over the past few weeks, he has made it one of the largest positions within his portfolio. There are several reasons why it can be an attractive investment for you:

Strong earnings growth

The Company’s revenue growth is only accelerating. On early Thursday, the Chinnese e-commerce giant reported 4th quarterly earnings that beat expectations, with a 13.4% jump in sales that marked its fastest growth two years. 

Furthermore, JD.com is crushing analyst expectations. “JD reported 7.42 adjusted yuan per American depositary share on sales of 347 billion yuan, or $47.8 billion, for the December-ended quarter,” according to Investor’s Business Daily. “Analysts polled by FactSet projected the Beijing-based company would post adjusted earnings of 6.20 yuan per ADS on sales of 330.66 billion yuan. Adjusted earnings increased 40% year-over-year.”

Cheap Valuation 

Recently, Insider Monkey ran a study to identify the cheapest large-cap stocks. They screened for stocks with with a market capitalization between $10 billion and $200 billion and with a forward P/E ratio less than 15. Then, they made a list of the 12 stocks that were most popular among the major hedge funds. 

One of the stocks that was shortlisted from the screen was JD.com. Not only was it cheap from a P/E perspective, it was one of the stocks hedge funds were overwhelmingly bullish on. Hence, the study ranked JD.com as the 9th most undervalued stock on their list.

Strong Fundamentals

JD.com clearly stands as one of the leading e-commerce companies in China. It has some of the greatest supply chain capabilities in all of China. CEO Sandy Xu said in a earnings call that JD.com’s success comes from its "relentless focus on building supply chain capabilities and logistics infrastructure." 

Very few companies are able to replicate the success of JD.com. It’s a classic example of a company that has a strong moat. It’s moat explains why quarterly active customers is has grown at double-digit rates for four consecutive quarters.

Disclaimer: Danial Jiwani holds a long position in JD.com.