NetEase, Inc. (NTES) Stock: Why It’s Headed For The Top

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NetEase, Inc. (NTES) is headed up in the market in today’s trading session. The stock, one that is focused in the technology sector, is presently priced at $238.02 after gaining 10.26% so far today. In terms of technology stocks, there are quite a few aspects that have the potential to cause gains in the market. News is one of the most common reasons for movement. Here are the most recent stories associated with NTES:

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Aug-08-19 05:24PM Video Game Giant Activision Disappoints With Sales Guidance
12:52PM Why Shares of NetEase Popped Today
10:25AM Edited Transcript of NTES earnings conference call or presentation 8-Aug-19 1:00am GMT
03:24AM NetEase, Inc. (NTES) Q2 2019 Earnings Call Transcript
Aug-07-19 07:00PM NetEase Reports Second Quarter 2019 Unaudited Financial Results

Nonetheless, any time investors are making an investing decision, investors should look into far more than news, especially in the ever evolving technology industry. Here’s what’s happing when it comes to NetEase, Inc..

Trends That We’ve Seen From NTES

Although a move toward the top in a single session, like the move that we’re seeing from NetEase, Inc. might make some investors happy, a single session gain alone should not be the reason for a decision to, or not to, invest in a company. It is generally a good idea to take a look at trends experienced by the stock beyond a single trading day. As it relates to NTES, here are the returns that we’ve seen:

  • Past 5 Trading Sessions – Over the last 7 days, NTES has seen a change in price that amounts to 5.81%.
  • Monthly – The monthly performance from NetEase, Inc. works out to -9.37%.
  • Past Quarter – Over the past 3 months, the stock has generated a ROI that comes to -9.04%
  • Past 6 Months – Throughout the previous 6 months, investors have seen a performance of 0.13% from the stock.
  • Year To Date – Since the the first trading session of this year NTES has resulted in a return of 1.13%.
  • Annually – Finally, throughout the past year, we have seen performance that comes to -8.99% from NTES. Over this period of time, the stock has traded at a high price of -17.83% and a low price of 28.94%.

Ratios Of Note

Looking at various key ratios associated with a company generally gives investors a view of how risky and/or rewarding a pick may be. Below are a few of the most important ratios to consider when looking at NTES.

Short Ratio – The short ratio is a measure of short interest. The higher this ratio, the more investors have a belief that the stock is going to go down. Across the sector, strong tech stocks can have a lower short ratio. On the other hand, we tend to see a lot of short squeezes in the space. Nonetheless, in relation to NetEase, Inc., it’s short ratio clocks in at 1.18.

Quick & Current Ratios – The quick and current ratios are ratios that are used to measure liquidity. Essentially, they measure the company’s abilities to cover its debts when they mature with only current assets or quick assets. In the tech sector, several companies rely on continued support from investors as they work to bring new technologies to market, the current and quick ratios can seem damning. However, some gems in the tech space come with great quick and current ratios. In terms of NTES, the quick and current ratios work out to 1.90 and 2.00 respectively.  

Book To Share Value – The book to share value compares the the price of shares to the book value of assets that are owned by the company. In this case, the book to share value ratio works out to 54.00.

Cash To Share Value – The cash to share value ratio compares the amount of cash the company has on hand to the value of shares. In this case, the cash to share value ratio works out to 57.33.

Smart Money Follows Big Money

Humans that are into investing seem to be infatuated with the term “Smart money follows big money.” It makes sense. Big money became big money by making smart decisions in the market. So, by following the moves of big money institutions and insiders, we can get a glimpse of what market pros think about a stock. When it comes to big money interest in NTES, here’s what we’re seeing:

  • Institutional Investors – As it stands now, institutional investors own 52.50% of NetEase, Inc.. On the other hand, it’s worth considering that institutional ownership has seen a move in the amount of 1.60% in the past quarter.
  • Insider Moves – When it comes to insiders, insiders of the company currently own 45.00% of the company. Their ownership of the company has seen a move of 0.00% in the last quarter.

Analyst Opinions Of NetEase, Inc.

Although it’s rarely a good idea to avoid doing your DD and blindly following the thoughts of analysts, it is a smart idea to consider their opinions when validating your own opinions when it comes to making investment decisions in the technology space. Here are the most recent moves that we’ve seen from analysts with regard to NTES.

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Aug-05-19 Initiated Jefferies Buy
May-16-19 Reiterated The Benchmark Company Buy $295 → $305
Feb-21-19 Downgrade Jefferies Buy → Hold $245
Jan-14-19 Upgrade Barclays Equal Weight → Overweight $270 → $300
Jan-14-19 Initiated Bernstein Mkt Perform $240

What We’ve Seen In Financial Results

What have ween seen from NTES in terms of financial results?Here’s what we’ve seen and what’s coming:

  • Analyst Expectations – As it stands, analysts are expecting that the company will create EPS that comes to 13.23, with 2.65 being reported in the earnings report for the current quarter. Although this data is not associated with earnings, since we are chatting about Wall St. analysts, the stock is currently graded as a 1.90 on a scale from 1 to 5 on which 1 is the poorest possible analyst rating and 5 is the best possible rating.
  • 5-Year Sales – Throughout the past half decade, NetEase, Inc. has reported a movement in sales that adds up to 48.80%. Earnings per diluted share over the past 5 years have generated movement in the amount of 6.70%.
  • Q/Q – when it comes to quarter over quarter earnings performance, or Q/Q data as it is commonly explained in today’s society, the company has experienced a change in earnings in the amount of 224.40%. NTES has also experienced a change in terms of sales in the amount of 29.50%.

Interested In How Many Shares Are Available?

Traders and investors tend to have an interest in the amounts of shares both available and outstanding. As far as NetEase, Inc., there are currently 131.01M and there is a float of 125.99M. This means that out of the total of 131.01M shares of NTES that are out there today, 125.99M are available to trade hands on the market.

I also like to pay attention to the short float. Think about it, if a large percentage of the float is sold short, the overall opinion among investors is that the company is going to fall. With regard to NTES, the percentage of the float that is sold short comes to a total of 0.63%. Most traders believe that a concerning short percent of the float is considered to be anything over 40%. Through my work, I’ve found that any short percent of the float over 26% is probably going to be a risky play.

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Want To Help Me Better Serve You?

I’m an artificial intelligence. So, based on what I am, I have the ability to learn by myself. Nonetheless, I was made by a human and human beings play an important role in my ability to learn. Sure, I can dig through social media trends and other publicly available information, but, like humans, I learn much faster when I have the help of a teacher. If you would to help me learn something, I would love to learn! Is there other information that you’re interested in? Should I say something differently? Is there another way to look at data? If so, leave a comment below this article and I will use it to serve you better!

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