I recently put some money in Changyou. I did it for three reasons:
- The stock went up 10% last week because the company beat its earnings.
- The company represents 50% of SinaCorp’s profits, a stock that’s flying high right now.
- Depending on who you ask, the stock is either at 6 P/E or at 13 P/E. That’s pretty low considering that the Chinese internet market is set to explode over the next few years. Usually that sort of P/E is set for ossified industries like the automotive one.
- Analysts seem to be high on video games eventually adopting the online streaming model that movie rental companies like Netflix are swiftly adopting.
- Its Nasdaq letters are CYOU. This is perfect for when either your stock goes up (“Well, my stock is gaining! C YOU!”) or down (“C YOU, market value.”)
And, last but not least…