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

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 Internet industry higher today making it today's featured internet winner. The industry as a whole closed the day up 0.5%. By the end of trading, NetEase rose $1.52 (2.8%) to $56.02 on average volume. Throughout the day, 618,730 shares of NetEase exchanged hands as compared to its average daily volume of 815,200 shares. The stock ranged in a price between $54.68-$56.09 after having opened the day at $54.76 as compared to the previous trading day's close of $54.50. Other companies within the Internet industry that increased today were: AOL ( AOL), up 22%, Innodata ( INOD), up 7.9%, Autobytel ( ABTL), up 6.7%, and BroadVision ( BVSN), up 5.7%.
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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 $7.11 billion and is part of the technology sector. The company has a P/E ratio of 13.8, below the S&P 500 P/E ratio of 17.7. Shares are up 21% year to date as of the close of trading on Monday. Currently there are nine 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 solid stock price performance, growth in earnings per share, increase in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

On the negative front, ExactTarget ( ET), down 8.1%, Remark Media ( MARK), down 7.8%, VirnetX ( VHC), down 6.1%, and CGI Group ( GIB), down 4.7%, were all laggards within the internet industry with LinkedIn ( LNKD) being today's internet industry laggard.

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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