+ Watch GA
on My Watchlist
Giant Interactive Group, Inc. develops and operates online games in the People's Republic of China.
Another real-life holding of mine. Earnings have grown at an annualized compound rate of 19% since 2011. EPS has grown at an annualized compound rate of 14% since 2010. Unfortunately, the pre-tax profit margin has been falling the past 3 years, so that is not a good thing, but it was still around 55% last year, which is a good profit margin, (though not great for a games/software company). The earned-on-equity has been fluctuating, coming in around 30% last year, (which is again good but not great for an online games company). The company has no debt, (which is one of my most favorite metrics). The current P/E is about 50% higher than its historic average, so the stock is no longer cheap. And the PEG ratio is a little over one, so reasonably priced by that metric, but not cheap. The company raised its dividend by more than 50% last year, so that is a positive sign. The stock yielded around 7.4% last year, so that is a great dividend yield, (and what originally attracted me to the stock). I think the stock price could grow by over 50% over the next 5 years. Add in the dividend yield and the stock could return 12% or more each year over those 5 years. This is below what I would normally accept as a return, (I generally want a 15% annual return), but I am giving this one a shot due to the good yield and the fact that they raised the dividend last year, and with the payout ratio being below 50%, they could still have room to raise it over the next 5 years, especially if the earnings keep growing. Not as positive on this stock as I am on some of my other picks, so I am curious to see how this plays out for me.
Giant Interactive has positioned itself well in the Chinese gaming market, which is booming with no plans of slowing down anytime soon. With all-star titles like ZT Online and World of Xianxia, GA should rake in the profits for years to come.
Strong momentum supported by lowest fundamental valuation ratios. Healthiest dividend and nice thick-margin operations. 12.
good dividend provider
Video game addiction will be recognized as the cause of the fall of the great Chinese Communist Economy and Civilization in 100 years. Right after the fall of Western Civilization from Guns killing people and Pharmaceutical Drug Addiction causing zombies to take over the Gun arsenals. GA rocks!
The company will continue to produce great earnings.
dividend and value
Company has anounced it will pay 0.42 per share div. around the end of May and that they intend to start paying semi-annual dividends. Thats a pretty good yield from a company with good growth prospects.
Has large portion of China game activity.
The Chinese gaming companies have several things in common:- They operate in a market that is growing at a rapid rate which offers great potential to all of them.- Their valuations are ridiculous. After substracting net cash from their market caps the results are p/e ratios of 6 or lower across the board.- They are cash machines. They don't require a lot of assets and the running games are providing them with lots and lots of cash to pay (special) dividends and buy back shares.This sounds very attractive to me. Now most people are hesitant when it comes to Chinese companies. First of all because there is the potential for fraud. However while you can manipulate earnings and books you cannot manipulate the hard cash that is being paid out to shareholders by these companies again and again. In my opinion this is enough evidence to prove that those are legitimate companies.Secondly people worry about the competition. Gaming companies have to constantly reinvent themselves and bring out new games or they will be left behind. If they dont succeed in attracting new players they have a problem. That is why I would recommend buying more than one of them to get some diversification to protect your portfolio against the risk of failure of one single company. The risk of new companies taking market share is minor, because it takes time, brand recognition and money to get into this market and new promising firms are likely to be taken over by one of the established ones.I think this is a huge opportunity for savy investors and if you know the Graham/Buffet definition of risk you know that these companies are all but risky, because the margin of safety is probably the biggest I have ever seen.I'm long CYOU NTES and GA.
cheap valuation to growth no debt lots of cash used to buy back shares paying real hard cash.careful China has ways of bleeding companys
Beat earnings predicted for past three quarters, as well, has beat the s&p for past 2 years
Its statements are healthy and its price is reasonable.
Seems like a good pick at fair price, might think of adding this to real protfolio.
Lot's of cash, a good dividend...payout ratio of 36% so lots of room to increase dividend. Trading at a discount to book value. No debt.
Escapism is big money. Keeping the players happy.
Strong excess cash position (I show about 850m vs their 1,778m market cap)Decent dividend (18 cents vs a $7.61 share price, 2.4%)Cheap: Earning yield of about 12%Good return on capital (I show on $22m of working capital after you pull out excess cash).Good prospects/growth - new games in pipeline after a year of being a bit stagnant
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