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NetEase Inc (NTES): Today's Featured Technology Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NetEase ( NTES) pushed the Technology sector lower today making it today's featured Technology laggard. The sector as a whole closed the day up 0.9%. By the end of trading, NetEase fell 60 cents (-1.3%) to $45.70 on light volume. Throughout the day, 637,044 shares of NetEase exchanged hands as compared to its average daily volume of one million shares. The stock ranged in price between $45.28-$46.07 after having opened the day at $46.07 as compared to the previous trading day's close of $46.30. Other companies within the Technology sector that declined today were: IEC Electronics Corporation ( IEC), down 11.6%, Warwick Valley Telephone Company ( WVT), down 11%, Baidu ( BIDU), down 10.1%, and Rudolph Technologies ( RTEC), down 9.8%.

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NetEase, Inc., through its subsidiaries, engages in online games, Internet portal, and wireless value-added services businesses in China. It operates an online community and offers Chinese language content and services. NetEase has a market cap of $6.17 billion and is part of the internet industry. The company has a P/E ratio of 12.7, below the S&P 500 P/E ratio of 17.7. Shares are up 10.8% year to date as of the close of trading on Monday. Currently there are eight analysts that rate NetEase a buy, no analysts rate it a sell, and four rate it a hold.

TheStreet Ratings rates NetEase as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

On the positive front, Spire Corporation ( SPIR), up 49.1%, Trio-Tech International ( TRT), up 18.4%, Cimatron ( CIMT), up 15.6%, and B Communications ( BCOM), up 14.7%, were all gainers within the technology sector with EMC Corporation ( EMC) being today's featured technology sector leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the technology sector could consider Technology Select Sector SPDR ( XLK) while those bearish on the technology sector could consider ProShares Ultra Short Technology ( REW).

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