| Stock (Symbol) | Stock Price | |
YY (YY) |
$49 |
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| Data is as of | Expected to Report | Sector |
September 11, 2013 |
Nov 1 – Nov 15 |
Technology |
| Sharek’s Take | ||
 YY (YY) is a musical and video game social network in China. YY.com primarily derives its revenue from online games and YY Music, with each contributing around 40% of sales. YY also generates income from advertising and YY’s membership program, these each account for around 10% of revenue each. YY is a hot Chinese Internet stock, and these are the hottest investments right now. The stocks are soaring because sales and profits are jumping through the roof. I will add YY to the Growth Portfolio and Aggressive Growth Portfolio today. |
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| lotOne-Year Chart | ||
 One thing that’s not good is YY is up from $10.5 to $50 in less than a year. The stock came out at around 17 times 2012 profits, and now sells for 42 times profits. Still, I feel this P/E is low, as YY is doubling profits and sales each quarter. What’s nice is the estimated Long Term Growth Rate of 47%. |
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| Earnings Table | ||
 Last quarter, revenue rose 118% and profits jumped 169%.YY blew past earnings estimates of $0.21 and posted profits of $0.35 last quarter. I think this put the stock on another level. Now the company has unlimited potential, analysts can’t calculate how much YY can make until the beatdowns slow. This will lead to a P/E up into the atmosphere. Annual Profit Estimates jumped by around 25 cents. That’s just in one-quarter. Does than mean estimates will rise by a dollar in a year? Will YY make $2.50 next year? If so, the P/E is now only 20 (we just don’t know it yet). Quarterly estimates look splendid. |
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| Fair Value | ||
 At a current quote of $50, YY is still undervalued. And that only assumes a P/E of 50. This stock could get a P/E of 60. And who knows? YY could make $2.50 next year. Using “internet thinking” my ceiling on this stock is $150. |
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| Ten-Year Chart | ||
 This stock is really extended in the ten-year chart. But I feel as though we must buy these Chinese Internet stocks while we can. I think China is going into a dot-com phase, like we saw in 1998-1999 here in the states. If you don’t get in now, you might not have another chance. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
6 of 25 |
YY seems to be a brand new money making machine. The potential here is enormous, but there’s risk of a correction because the stock has just gone from $10 to $50. YY is red-hot and I don’t want the stock to leave us behind, but I wish to caution individual investors, who should only take a small position due to the high risk. |
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Aggressive Growth Portfolio
5 of 11 |
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