With shares of Sina (NASDAQ:SINA) trading around $56, is SINA an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
T = Trends for a Stock’s Movement
Sina is an online media company serving China and the global Chinese communities. The company's digital media network of SINA.com, SINA.cn and Weibo.com, enable Internet users to access professional media and user-generated content in multimedia formats from the web and mobile devices and share their interests to friends and acquaintances. SINA.com offers distinct and targeted professional content on each of its region specific websites and a range of complementary offerings. SINA.cn provides information and entertainment content from SINA portal customized for wireless device users. It generates its revenues from online brand advertising and fee-based services. International consumers make up a large portion of the population, and they are growing eager to become connected through the social world, so companies like Sina stand to make increasing profits through their networks.
T = Technicals on the Stock Chart are Strong
Sina stock has been fairly quiet over the last year as it attempts to regain its footing after a large decline. The stock seems to be perking up and getting ready to explore new prices. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Sina is trading above its rising key averages which signal neutral to bullish price action in the near-term.
(Source: Thinkorswim)
Taking a look at the implied volatility (red) and implied volatility skew levels of Sina options may help determine if investors are bullish, neutral, or bearish.
| Implied Volatility (IV) | 30-Day IV Percentile | 90-Day IV Percentile | |
| Sina Options | 39.22% | 30% | 29% |
What does this mean? This means that investors or traders are buying a small amount of call and put options contracts, as compared to the last 30 and 90 trading days.
| Put IV Skew | Call IV Skew | |
| July Options | Average | Average |
| August Options | Average | Average |
As of today, there is an average demand from call and put buyers or sellers, neutral over the next two months. To summarize, investors are buying a small amount of call and put option contracts and are leaning neutral over the next two months.
On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.
E = Earnings Are Improving Quarter-Over-Quarter
Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Sina’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Sina look like and more importantly, how did the markets like these numbers?
| 2013 Q1 | 2012 Q4 | 2012 Q3 | 2012 Q2 | |
| Earnings Growth (Y-O-Y) | 109.52% | -74.95% | 102.75% | 226.67% |
| Revenue Growth (Y-O-Y) | 19% | 4.32% | 16.96% | 10.63% |
| Earnings Reaction | 1.29% | 5.36% | -15.12% | 10.39% |
Sina has seen improving earnings and revenue figures over the last four quarters. From these figures, the markets have been pleased with Sina’s recent earnings announcements.
P = Poor Relative Performance Versus Peers and Sector
How has Sina stock done relative to its peers, NetEase (NASDAQ:NTES), Sohu (NASDAQ:SOHU), Yahoo! (NASDAQ:YHOO), and sector?
| Sina | NetEase | Sohu | Yahoo! | Sector | |
| Year-to-Date Return | 11.87% | 48.86% | 29.68% | 31.51% | 27.56% |
Sina has been a poor relative performer, year-to-date.
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Sina is an online media company that aims to serve Chinese consumers in and outside of China. The stock is now resting after seeing large declines in the last few years. Over the last four quarters, earnings and revenue numbers have improved, which has pleased investors. Relative to its peers and sector, Sina has been a poor relative performer, year-to-date. WAIT AND SEE what Sina does in coming quarters.
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