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

NetEase ( NTES) pushed the Internet industry lower today making it today's featured Internet laggard. The industry as a whole closed the day up 1.4%. By the end of trading, NetEase fell $8.62 (-14.8%) to $49.56 on heavy volume. Throughout the day, 5.6 million shares of NetEase exchanged hands as compared to its average daily volume of 671,000 shares. The stock ranged in price between $49.42-$53.75 after having opened the day at $53 as compared to the previous trading day's close of $58.18. Other companies within the Internet industry that declined today were: Facebook Inc Class A ( FB), down 6.3%, Groupon ( GRPN), down 6%, Local Corporation ( LOCM), down 4.3%, and BroadVision ( BVSN), down 3.3%.

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 $7.17 billion and is part of the technology sector. The company has a P/E ratio of 14.3, below the average internet industry P/E ratio of 17.9 and below the S&P 500 P/E ratio of 17.7. Shares are up 29.7% year to date as of the close of trading on Wednesday. Currently there are eight analysts that rate NetEase a buy, no analysts rate it a sell, and six rate it a hold.

TheStreet Ratings rates NetEase as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, attractive valuation levels and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

On the positive front, Deltathree ( DDDC), up 40%, LiveDeal ( LIVE), up 14.5%, Tucows ( TCX), up 12%, and SINA Corporation ( SINA), up 10.4%, were all gainers within the internet industry with Baidu ( BIDU) being today's featured internet industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the internet industry could consider First Trust Dow Jones Internet Idx ( FDN) while those bearish on the internet industry could consider ProShares Ultra Short Technology ( REW).

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