4. Shanda Interactive (SNDA) operates online games.
Numbers: Fourth-quarter profit increased 8% to $54 million, or 78 cents a share, as revenue soared 49% to $222 million. Shanda's operating margin contracted from 44% to 37%. Its balance sheet contains $1.9 billion of cash and $153 million of debt.
Stock: Shanda Interactive increased 22% over the past 12 months, less than U.S. indices. The stock sells for a price-to-projected-earnings ratio of 11, a 50% discount to the industry average. The shares are also cheap based on book value and sales.
Catalyst: Internet penetration is rising in China as it tapers in the U.S. Online gaming is a national phenomenon, with roughly 70 million participating. The industry is expected to double in the next few years. Shanda holds a top-three market share.Consensus: Of 21 analysts covering Shanda, 10 recommend purchasing the shares, nine suggest holding and two advise selling. The stock has returned 19%, annually, over the past three years. It ranks in the top 6% of our coverage universe.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV