This company’s Weibo business had 22 million visitors the first day of the World Cup, and the company has more than $1 billion in cash on its balance sheet.
Sina Corporation (SINA)
from The Value Bounce
Sina Corporation (SINA) is one of China’s top Internet companies, offering advertising driven portals for both desktop and mobile users. It is also the majority owner of Weibo, which is often referred to as the Twitter of China.
SINA’s share price has dropped since peaking last October and is down 47% so far this year.
For the quarter, SINA produced substantial adjusted revenue growth of 38% to $167.3 million as a surge in online advertising drove the bulk of the gains. Non-advertising revenue moved higher, in comparison, by just 17% to an adjusted $31.6 million.
Weibo is still 57% owned by SINA, so it still factors substantially into SINA’s results. Without Weibo, there’s not a lot of growth for SINA. Weibo is growing like crazy. The company’s monthly active users surged 34% year over year to 143.8 million as net revenue jumped 161% and adjusted net loss fell by 75%.
And the company’s cash position indicates it is substantially undervalued. SINA’s cash, short-term, and long-term investments totaled about $1.8 billion. In short, investors in SINA are tapping into Weibo’s growth and essentially getting other SINA assets for free.
Buy SINA at market up to $50 with 15% trailing stop loss.
Carl Delfeld, The Value Bounce, www.thevaluebounce.com, 800-250-9657, June 17, 2014