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.
Shares of China Sky One Medical (Nasdaq:CSKI) have taken a tremendous swing upward. The stock is trading at $3.23 as of 3:41 p.m. ET, 23.3% above Thursday's closing price of $2.62. Volume is at 528,537, 4.3 times the daily average of 122,300.
Shares of China Sky One Medical (Nasdaq:CSKI) have taken a tremendous swing upward. The stock is trading at $2.57 as of 2:25 p.m. ET, 20.7% above Wednesday's closing price of $2.13. Volume is at 151,799, 1.2 times the daily average of 123,500.