China’s Baidu (BIDU) and Shanda (SNDA): Relative strength favorites
Posted by: in Goog newsFiled under: International markets, Google (GOOG), Yahoo! (YHOO), China, Newsletters, Japan, Technical Analysis, Stocks to Buy
Jim Collins, editor of OTC Insight, uses a proprietary quantitative system to isolate high growth and momentum stocks trading at reasonable valuations relative to that growth.
His latest two featured stocks based on these criteria are both China-based companies: Internet search provider Baidu.com (NASDAQ: BIDU) and online gaming firm Shanda Interactive Entertainment Limited (NASDAQ: SNDA).
Collins notes that Baidu’s search engine was the most frequently used in China in 2006. Last December, he adds, Baidu announced its intention to enter the Japanese search market, which is currently dominated by Yahoo! (NASDAQ: YHOO) and Google (NASDAQ: GOOG).
In March, he adds, the company launched a limited beta trial of its Japanese language search services, which included web and image search.
For the quarter ended June 30, 2007, he reports, Baidu showed earnings of $0.61 a share, compared with $0.21 per share in the prior year. Revenues, he states, increased 121% to $53 million. The stock, he explains, has a relative strength rating of 99 (out of 100) and garners a B+ for accumulation and distribution.
Meanwhile, his growth and momentum strategy also favors Shanda Interactive, which offers online games. Collins notes that Shanda’s most popular games are known as massively multi-player online role-playing games.
The games, he explains, allow thousands of users to interact with one another in a virtual world by assuming ongoing roles or characters with different features. They are continuous, and players accumulate features and communicate with one another through instant messaging.
In July, he adds, Shanda announced that it signed an agreement to acquire Aurora Technology, which he contends is recognized as one of the top brands in this market. Also, the company acquired over 50% in Actoz, a South Korea online game developer.
For the quarter ended June 30, he observes that Shanda reported net income of $0.37 per share compared to $0.12 in the prior year. Revenues increased 45% to $74 million. He notes that the stock earns a relative strength rating of 94 and receives a B+ for accumulation and distribution.
Each day, Steven Halpern’s TheStockAdvisors.com features the latest stock picks and investment ideas from the nation’s leading financial newsletter advisors.
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