Shanda Interactive Entertainment (NASDAQ: SNDA) is a leading interactive entertainment media company in China. The firm offers a diversified content portfolio, including massively multi-player online role-playing games, online board games, network PC games, cartoons, works of literature and music. Shanda's interactive platform attracts a loyal base of users, who pay access subscription fees. Electronic Arts (NASDAQ: ERTS) is a major competitor.
The company pleased investors earlier in the month, when it reported fiscal Q2 EPS of 56 cents and revenues of $122.1 million. Analysts had been looking for 51 cents and $115.3 million. Revenues from massively multiplayer online role-playing games increased 47.0% year-over-year and 8.5% quarter-over-quarter, to a record high of $101.3 million. Oppenheimer subsequently upgraded the stock to "outperform" and Brean Murray reiterated its "buy" rating.
Oppenheimer upgraded shares of Shanda Interactive (NASDAQ: SNDA) to Outperform from Perform following the company's better-than-expected quarter to reflect its growth acceleration in the casual games platform and margin improvements.
SAIC (NYSE: SAI) was upgraded to Outperform from Market Perform following the solid Q2 report and guidance.
Susquehanna upgraded Zumiez (NASDAQ: ZUMZ) to Positive from Neutral citing positive August comps, revised merchandising, easier comps, and solid financial position.
Novellus (NASDAQ: NVLS) was raised to Overweight from Equal Weight at Morgan Stanley.
Analyst downgrades:
Morgan Stanley downgraded the Semiconductor Capital Equipment sector to In-Line from Attractive citing optimistic expectations for Q4 orders following the recent bounce in stocks. The firm downgraded Lam Research (NASDAQ: LRCX) to Underweight from Overweight and KLA-Tencor (NASDAQ: KLAC) KLAC to Equal Weight from Overweight.
MOST NOTEWORTHY: Shanda Interactive, Evergreen Solar, SunPower and Marriott were today's noteworthy downgrades:
Citigroup downgraded shares of Shanda Interactive (NASDAQ:SNDA) to Hold from Buy following the company's lower-than-expected guidance as they see a lack of positive catalysts.
Merrill downgraded Evergreen Solar (NASDAQ:ESLR) and SunPower (NASDAQ:SPWR) to Sell from Neutral citing a potential reduction in German tariffs.
Morgan Stanley downgraded Marriott (NYSE:MAR) to Equal Weight from Overweight citing economic pressures on business travel.
OTHER DOWNGRADES:
Vivus (NASDAQ:VVUS) was downgraded at Wachovia to Market Perform from Outperform.
UBS lowered Juniper(NASDAQ:JNPR) to Neutral from Buy.
Cemex (NYSE:CX) was downgraded to Neutral from Overweight at JP Morgan.
Jim Collins, editor of OTC Insight, uses a proprietary quantitative system to isolate high growth and momentum stocks trading at reasonable valuations relative to that growth.
Collins notes that Baidu's search engine was the most frequently used in China in 2006. Last December, he adds, Baidu announced its intention to enter the Japanese search market, which is currently dominated by Yahoo! (NASDAQ: YHOO) and Google (NASDAQ: GOOG).
In March, he adds, the company launched a limited beta trial of its Japanese language search services, which included web and image search.
For the quarter ended June 30, 2007, he reports, Baidu showed earnings of $0.61 a share, compared with $0.21 per share in the prior year. Revenues, he states, increased 121% to $53 million. The stock, he explains, has a relative strength rating of 99 (out of 100) and garners a B+ for accumulation and distribution.
The9 (NASDAQ: NCTY) implied volatility elevated into 8/29 EPS.
NCTY, an online game operator headquartered in Shanghai, is recently down $0.10 to $38.65. NCTY is expected to report EPS on 8/29/07. NCTY has a market cap of $996 million. NCTY September option implied volatility of 79 is above its 26-week average of 59 according to Track Data, suggesting larger risk.
SNDA, an interactive entertainment media company and operator of on line games in China, is recently up $1.56 to $30.68. SNDA has a market cap of $2.2 billion. SNDA is expected to report second quarter EPS on 8/28. SNDA September option implied volatility of 70 is above its 26-week average of 46 according to Track Data, suggesting larger risk.
NetEase (NASDAQ: NTES) implied volatility of 43 above 26-week average of 36.
NTES, an interactive online community in China, is recently down .10 to $16.33. NTES over all option implied volatility of 43 is above its 26-week average of 36 according to Track Data, suggesting larger price fluctuations.
Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.
MOST NOTEWORTHY: Intel Corp (INTC), Advanced Micro Devices, Inc (AMD), Post Properties, Inc (PPS), Analogic Corp (ALOG) and the base metals sector were today's more noteworthy upgrades:
DA Davidson raised Intel Corp's (NASDAQ: INTC) rating to Buy from Neutral based on market share gains and unexpected PC growth.
American Technology upgraded Advanced Micro Devices Inc (NYSE: AMD) to Buy from Neutral as the firm expects shares to trade higher near-term with data not likely to get worse over the next six months. The firm suspects AMD could win a notebook platform at Toshiba Corp (TOSBF) and expects further offerings at Dell Inc (DELL).
Banc of America upgraded shares of Post Properties Inc (NYSE: PPS) to Neutral from Sell and raised their target to $53 from $42 after REIT Wrap, a real estate industry newsletter, reported the company may have already received several unsolicited bids.
Stanford upgraded Analogic Corp (NASDAQ: ALOG) to Buy from Hold based on improving fundamentals in the security and medical businesses.
Goldman upgraded the base metals sector to Attractive from Neutral as the firm believes above-consensus metal prices for 2008-2009 are sustainable. The firm favors copper fundamentals over nickel, zinc and aluminum and views Freeport-McMoRan Copper & Gold Inc (FCX) as its top pick.
MOST NOTEWORTHY: Level 3 Communications Inc (LVLT) and General Motors Corp (GM) were today's notable upgrades:
Deutsche Bank raised Level 3 Communications Inc (NASDAQ: LVLT) to Hold from Sell with a $5.40 target based on the belief the company will meet 2007 expectations.
General Motors Corp (NYSE: GM) was upgraded at Merrill Lynch to Buy from Sell based on increased confidence the company will leverage its liquidity and legacy assets, specifically its pension, to drive positive changes.
OTHER UPGRADES:
MasterCard inc (NYSE: MA) was upgraded to Overweight from Neutral at JP Morgan on valuation.
Prudential upgraded Brinker Int'l Inc (NYSE: EAT) to Overweight from Neutral.
Following the company's strong Q4 report, Piper Jaffray upgraded shares of Shanda Interactive Entertainment Ltd ADS (NASDAQ: SNDA) to Outperform from Market Perform with a $29 target, citing improved fundamentals and increased confidence in the come-stay-play model, among other reasons.
Dover Downs Gaming & Entertainment (NYSE: DDE) moved to Hold from Sell at Stifel Nicolaus, citing valuation.
Prudential raised HealthNet Inc (NYSE: HNT) to Neutral from Underweight, with a $52 target.
3M Company (NYSE: MMM) was raised to Buy from Hold with an $86 target at Soleil Securities following last nights $7B buyback announcement, which the firm believes will act as a positive catalyst.
Bear Stearns upgraded Applebee's Int'l Inc (NASDAQ: APPB) to Peer Perform from Underperform following the company's announcement that it hired a financial adviser to explore strategic alternatives.
Credit Suisse upgraded Build-A-Bear Workshop (NYSE: BBW) to Outperform from Neutral, with a $37 target.
MOST NOTEWORTHY: Energy Partners (EVEP) and HB Fuller (FUL) led a moderate initiation list Monday as the Dow and Nasdaq moved higher in early trading.
AG Edwards initiated EV Energy Partners (NASDAQ:EVEP) a Buy and a $22 target, as the firm likes the company's experienced management team, debt-free balance sheet, and low-risk development opportunities.
Keybanc initiated H.B. Fuller Co. (NYSE:FUL) with a Buy and $28 target, citing low manufacturing cost, portfolio mix and pricing power.
CE Unterberg initiated Shanda Interactive Entertainment Ltd. (NASDAQ:SNDA) with a Buy and $21 target, as the firm is positive on the company's new revenue model.
OTHER INITIATIONS:
UBS Investment initiated Ryanair (NASDAQ:RYAAY) with a Buy and a $60.41 target.
Finally, SG Cowen initiated International Business Machines Corp. (NYSE:IBM) with a Neutral, citing valuation and a lack of traction in its services unit for the rating.
a leading interactive entertainment media company in China. The firm offers a diversified content portfolio, including massively multi-player online role-playing games, online board games, network PC games, cartoons, works of literature and music. Shanda's interactive platform attracts a loyal base of users, who pay access subscription fees. Electronic Arts (NASDAQ: ERTS) is a major competitor.
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