Shanda Anyone?
I just saw that
Trader Mike reviewed a chart of one of the big winners I considered buying last year. Of course I didn't and instead missed out on
Shanda's tear. Here's the deal with Shanda--China's largest online games provider--they've been around for 5 years but just went public last May. Technically speaking, Shanda's chart is the chartist's equivalent of a wet dream--a cool and calm move & bounce ride along the 50 DMA. AndFundamentals are still rocking:
IBD testified to their prospects last August when they observed that
Shanda has two things going for it the others don't. Shanda has almost no exposure to the volatile wireless market. And it's the largest player by far in a fast-growing and profitable business in China: online games. "It's a pure-play gaming company, and that business remains robust," said analyst Mark Argento of ThinkEquity Partners. "Wireless is only 15% of Netease's business, but it continues to plague them." Industry researcher IDC estimates the online gaming market in China will reach $810 million by 2007, up from $150 million last year. Shanda's revenue will likely approach $140 million this year and $190 million in 2005...Players pay mostly by the hour. The low cost - just pennies an hour - makes it an affordable pastime for young people. "It is very cheap on an hourly basis, but it is a continuous stream of revenue for (Shanda), says one Piper Jaffray aanalyst.
I believe the company's platform is strong and broad enough to lock in their loyal customer base--this stock should excel further.
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