Anyone looking for a reason behind the spectacular rise in Chinese Internet stocks this year need look no further than NetEase.com .
NTES may look pricey at 108 times earnings, but that price-to-earnings ratio will come down after tonight, when the company beat estimates by 4 cents a share with 28-cent earnings. And with 259% year-over-year revenue growth, the company’s price-to-sales ratio of 48 will be coming down too.
That kind of revenue growth was common in U.S. Internet stocks in 1999, but with NetEase, it comes with real earnings behind it.
So while the stock may be up more than 2,700% from its 52-week low of $1.60 a share, don’t be surprised if NTES continues higher. In a market hungry for growth stories, NTES is a full-course dinner.
Also after the close, NVIDIA warned and Macrovision
beat estimates.
The broader market was mixed during the day, but tech stocks finished higher after IDC upped its PC sales outlook.
The Nasdaq rose 4 to 1735, the S&P 500 slipped 2 to 996, and the Dow lost 18 to 9266. Volume declined to 1.29 billion shares on the NYSE, and 1.54 billion on the Nasdaq. Decliners led 17-15 on the NYSE, but advancers led 19-12 on the Nasdaq. Upside volume was 51% on the NYSE, and 60% on the Nasdaq. New highs-new lows were 184-36 on the NYSE, and 250-11 on the Nasdaq.
AT&T gained 9% on an upgrade.
MRV Communications surged 22% on a positive mention in Barron’s.
Roxio slipped 3.7% as it released more Napster details.
VeriSign gained 3.4% after is won an outsourcing contract with XO Communications.
Computer Sciences edged higher despite a delay in a big IRS project.
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