Sohu.com, Inc. (NASDAQ:SOHU)

China is getting more and more PCs and broader access to the internet. It is inevitable that they will get their content served they way they want it. As far as the financial numbers and fundamentals go, I don't believe any of them and don't trust any Chinese company as far as I can throw it.... I've learned the hard way. However, the growth of the Internet in China seems like an unstoppable force, so it seems logical to bet on a Chinese Google.

china internet - R yoy +18%
no div
Total Debt / Equity    0.00
Price Earnings    11.30
Price/Sales    2.41
Price/Book    2.01
Price/Cash Flow    7.60

This is tracking porfortlio of the 20 stock I pick for 2012...

No competion worth mentioning in China. Direct access through TV, i.e., no other intervening device. Thus, simplicity is key. Has no significant problems with the government, like SINA, with fiscalization, because it uses what has already been censored.

stock market rebound

Because "the force," justified or not, is still with China and Google, albeit standing on legitimate principle, removed themselves from the game

China likes computers

I've had sohu for a while, along with Baidu, that's my tech bet on China. I live in Shanghai and young people here are into the internet in a big way. There may be a China property bubble but these young professionals don't care, they just want their internet 24/7.

1x - 4/1

The proliferation of computers in china is just getting started and it has the most internet users in any nation. Because of China's massive economic growth, more people will be visiting this site. Combine it with strong fundamentals and this company is poised only to grow.

#12 of the Top 100 Fastest Growing Companies, according to CNN Money

rule breakers

Good growth and earnings.

I've had this pick open for 4 months, and as of today (11/5/2010) it has a $74.05/share closing price and roughly an 80%+ gain since my starting price. This was a classic Peter Lynch inspired play. Looking at the most recent balance sheet you could see $600M in cash. At $41/share, SOHU had a roughly $1.5B market cap. Deduct the cash, and you get a market cap of $900M and an adjust share price of roughly $25/share. With a positive earnings history, and most recent earnings of roughly $3/share, that equates to a cash-adjusted PE of around 8 or 9. A single digit PE for a company with a positive, stable earnings history, and it has no debt?!?! That alone is very compelling. When you figure out that the earnings are actually growing (even if slowly), that makes it even better. The only question I have left is why didn't I buy more at the time?

intuition

good

china's population

Looks cheap, possible acquisition target.

Oversold