Why SINA Shares Soared

Before you go, we thought you'd like these...
Before you go close icon

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of SINA jumped more than 11% Wednesday after the Chinese Internet media company reported better-than-expected quarterly results.

So what: Net revenue rose 21% year over year to $184.6 million, which translated to a 144% gain in non-GAAP net income to $0.42 per share. By contrast, analysts were looking for adjusted earnings of just $0.32 per share on lower sales of $178.61 million.

What's more, SINA provided guidance for non-GAAP fourth quarter sales between $190 million and $194 million, which is also well above analysts' expectations for sales of $182.1 million.

Now what: CEO Charles Chao said, "We are pleased with our results for the third quarter with significant growth in profitability driven primarily by strong momentum in Weibo monetization." In case you're unfamiliar, Weibo is SINA's wildly popular microblogging platform, which Chao later said grew 11.2% from June to September to reach 60.2 million daily active users.

After today's pop, shares of SINA do look relatively expensive, trading north of 42 times next year's estimated earnings. But don't let its high price fool you; if SINA can maintain even a fraction of this momentum and continue to grow earnings as margins expand, I think the stock could still prove a bargain for patient investors down the road.

Three more long-term stocks for your portfolio
As every savvy investor knows, Warren Buffett didn't make billions by betting on half-baked stocks. He isolated his best few ideas, bet big, and rode them to riches, hardly ever selling. You deserve the same. That's why our CEO, legendary investor Tom Gardner, has permitted us to reveal The Motley Fool's 3 Stocks to Own Forever. These picks are free today! Just click here now to uncover the three companies we love. 

The article Why SINA Shares Soared originally appeared on Fool.com.

Fool contributor Steve Symington has no position in any stocks mentioned. The Motley Fool recommends and owns shares of SINA. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

People are Reading