Why JD.com's Stock Fell 13% Lower Last Month

What happened

Shares of JD.com (NASDAQ: JD) fell 12.7% in August of 2018, according to data from S&P Global Market Intelligence. The Chinese e-commerce titan failed to impress investors with its second-quarter earnings report.

So what

JD's adjusted second-quarter earnings of $0.05 per American Depositary Share was only half of the year-ago period's bottom-line take, although net revenues rose 31% year over year to land at $18.5 billion. Analysts had been expecting a flattish earnings performance of $0.10 per ADS.

Now what

The soft earnings line was a direct result of JD boosting its R&D budget by 80% above the year-ago period's reading. The company is working on advanced supply chain and logistics management tools and is already reselling these services to other Chinese retailers and e-tailers.

In my view, that's a solid investment in this tech-heavy company's long-term future, and no reason at all to drop share prices nearly 13% lower. But that's what we've got, so this might be a good time to consider starting an investment position in JD.com. All told, the stock is trading 36% lower in 2018, and you can pick up shares for the low, low price of 18 times JD's free cash flow.

10 stocks we like better than JD.comWhen 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 quadrupled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and JD.com 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 August 6, 2018

Anders Bylund has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends JD.com. The Motley Fool has a disclosure policy.