Giant Interactive Group (GA)

Predaking (99.10) Submitted: 8/14/2008 11:57:11 AM : Start Price: $10.51 GA Score: +2.03

Giant Interactive (GA), a leading online game developer that controls one of the most popular games in China, ZT Online. China's sales revenues for the online gaming market jumped 61.5% from the previous year and the number of online games is up 23% year over year.

GA controls a 25% stake in 51.com, China's largest independent social networking website. The social networking powerhouse is set to come public through an IPO on the Nasdaq by the end of next year. The stock trades at a forward P/E ratio of only 8, yet it grew net income at an impressive rate of 36% year over year in the first quarter. Giant Interactive also has a strong cash position of $800 million and zero debt.

The stock has fallen over 30% since May. Investors should use the weakness created by the earthquake and the plunging Chinese stock market to pick up the shares on the cheap.

-Condensed from James Altucher article