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Chinese Internet Stocks Signal Trouble – Voice of the People

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Chinese Internet Stocks Signal Trouble

As of Monday afternoon, many of the leading Chinese internet stocks are coming under some distribution. Last night, China reported some economic data that was below analysts expectations. This tells us that the world's hottest economy could be cooling off. Any slowdown in China could be problematic for the global economy.

Sina Corp ( SINA ) is a leading Chinese internet stock that started the session very strong. The stock traded as high as $80.80 a share at the open. This afternoon, SINA is trading lower by $2.51 to $74.89 a share. This is a reversal of nearly $6.00 a share from the intra-day high. If the stock closes at this level it will have formed a bearish outside reversal day on the charts.

The volume is also slightly higher than most of the past trading days and this tells us that the sell off has institutional conviction. The stock will have very good daily chart support around the $61.00 level. Short term traders can watch for intra-day support around the $73.00, and $70.66 levels.

Other leading Chinese internet stocks that are coming under intra-day selling pressure include Baidu Inc ( BIDU ), Netease.com Inc ( NTES ) and Sohu.com Inc ( SOHU ). These leading Chinese internet stocks should be followed very closely over the next week or so. Further reversal days in the Chinese ADR's could be signal future problems ahead for the Chinese economy.

Nicholas Santiago

InTheMoneyStocks.com

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Chinese Internet Stocks Signal Trouble - Voice of the People

Stocks to Watch: Tudou, Youku.com (Update 1)

NEW YORK -- Chinese online video giant Youku.com announced it is buying peer Tudou in an all-stock deal valued at more than $1 billion. The combined entity will be called Youku Tudou and will be a leading online video company in the world's largest Internet market. Tudou reported a net loss of 511.2 million yuan ($81.2 million) last year, while Youku on Monday posted a net loss of 172.1 million yuan. Youku shares were plunging 10% to $22.50 in premarket trading Monday while Tudou shares were surging 118.8% to $34. FuelCell Energy reported a first-quarter loss of 5 cents a share, narrower than the loss of 6 cents a share expected by analysts. Shares were gaining 9.3% to $1.64. Carnival shares were rising 2.3% to $31.28 after being upgraded to outperform from underperform by Exane BNP Paribas. The stock has been hurt recently by Carnival's cruise ship accidents. PepsiCo on Monday named former senior Wal-Mart executive Brian Cornell to head Pepsi's largest and most profitable unit, the Americas-wide food division. PepsiCo also named longtime company executive John Compton to the new position of president. Cornell and Compton, along with European operations chief Zein Abdalla, are viewed as the top internal candidates to succeed CEO Indra Nooyi, who has been getting heat from investors. "Today marks an important and essential step in PepsiCo's journey to continue to deliver sustainable growth," Nooyi said in a press release. "John and Brian are superb executives and will both contribute enormously in their new roles to ensure that we compete effectively and efficiently in the global marketplace." Shares were adding 1% to $63.80. Japan's Asahi Kasei agreed to buy Zoll Medical , the medical equipment maker, for $2.21 billion. Asahi Kasei, which makes chemicals and construction materials, agreed to buy Zoll for $93 a share in a tender offer. The transaction price is a premium of 29.6% over Zoll's average closing stock price over the last 30 trading days. Zoll closed Friday at $75.10. JetBlue has held talks with senior management of Aer Lingus about taking a stake in the Irish airline, the Irish Times reported. JetBlue is Aer Lingus management's preferred trade investor at a time when the Irish government is planning to sell its 25% holding in the airline, the newspaper said, citing informed sources. The stake is valued at about 116 million ($152.3 million). LDK Solar is expected by analysts to post a fourth-quarter loss of 67 cents a share. Federal prosecutors investigating whether U.S. executives at beauty products company Avon broke foreign-bribery laws have presented evidence in the probe to a grand jury, The Wall Street Journal reported. Authorities are focused on a 2005 internal audit report by the company that concluded Avon employees in China may have been bribing officials in violation of the Foreign Corrupt Practices Act, the Journal said. -- Written by Joseph Woelfel and Andrea Tse >To contact the writer of this article, click here: Joseph Woelfel Related links: Investors Still Skeptical of Bank Stocks Why Apple Didn't Release a $299 iPad

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Stocks to Watch: Tudou, Youku.com (Update 1)

MagicJack Shares Climb as Economy Pushes Calls to Web: Israel Overnight

By Leon Lazaroff and Zachary Tracer - Sun Mar 11 21:00:00 GMT 2012

MagicJack VocalTec Ltd. (CALL), a pioneer of phone call-over-Internet technology, climbed the most among Israeli stocks traded in the U.S. last week on prospects demand for cheaper calls will spur the company to report its first profit this year.

Netanya, Israel-based MagicJack added 9.2 percent in U.S. trading last week to $24, bringing its advance for the year to 76 percent, the best performance of the 25 stocks on the Bloomberg Israel-US 25 Index (ISRA25BN) of the most-traded Israel companies in New York. The measure added 0.8 percent on March 9 to 85.41, trimming its decline in the week to 0.3 percent.

MagicJack, which reports audited fourth-quarter results this week, will turn a first profit of as much as $27.8 million in 2012, according to analyst estimates collected by Bloomberg. With the U.S. economy growing less than 2 percent in the past three quarters, consumers are cutting costs by using cheaper Internet calling offered by MagicJack and Microsoft Corp.s Skype Technologies SA, according to Eagle Global Advisors LLC.

People, especially in a tough economic environment, look for ways to reduce their expenditures, and companies like MagicJack and Skype are those types of companies that attract users due to their low costs, said John Gualy, a partner at Eagle Global Advisors in Houston and portfolio manager for the Timothy Plan Israel Common Values Fund (TPAIX). Theyre going from losing money last year to starting to generate good cash flow this year.

Gualys fund owned 11,500 shares in MagicJack at the end of 2011. He said the Israel Common Values Fund manages around $9 million.

MagicJack shares still have room to climb and are undervalued given the companys potential to grow revenue by as much as 30 percent this year, Chief Executive Officer Dan Borislow said in an interview on March 9. He said the companys MagicJack Plus device, which lets users make and receive calls over the Internet without turning on a computer, will help attract more customers.

In the United States, people are used to using telephones, and unlike Skype we enable the use of a telephone, he said by phone from West Palm Beach, Florida. Really anyone who has high speed Internet access, we have something to sell or provide those people.

The company, whose TV ads featured U.S. womens soccer player and Olympic gold medalist Abby Wambach, will file audited 2011 results on March 14 or 15, Borislow said. The net loss in the fourth quarter of 2011 is expected to be 9 cents a share on sales of $29.6 million, the company said in a Feb. 16 statement. The figures exclude one-time gains and charges as well as other adjustments.

We dont expect anything different at all from what weve already put out, Borislow said.

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MagicJack Shares Climb as Economy Pushes Calls to Web: Israel Overnight

Cramer: IAC/InterActiveCorp Is a Buy

From Groupon

The trick, the Mad Money host explained, is to forget about anything that seems the slightest bit sexy. He would avoid the red hot dotcoms, especially the Internet initial public offerings that generate a lot of hype.

When you've got an Internet IPO that's got tons of hype, yet not much in the way of earnings, the only way to profit is by getting in on the actual deal, and then selling into the initial spike, Cramer said. I know I've said this before, but I'll keep repeating it either until I'm blue in the face or people stop making the rookie mistake of paying up for these names after they've begun trading.

Investors should, however, look for overlooked and undervalued dot-coms that have been around a while, he continued. Take IAC/InterActiveCorp

The recent Internet IPOs are still trying to figure out their business models, but IACs formative years passed long ago. Since founded in 1986 by billionaire Barry Diller, the company has been through numerous incarnations. It was one of the hottest growth stocks of the 1990s. The company made a number of acquisitions and became so large and complex that few people could wrap their heads around it, Cramer said. In 2008, the company broke itself up into five separate public companies: a home shopping network, a travel and leisure business, Ticketmaster and Lending Tree. IAC kept its core and high-growth Internet business, though.

Perhaps became of tis contused legacy, Cramer said IAC has largely been dismissed or ignored by most investors. Even so, the stock is up 248 percent since the generational low in March 2009. It rallied 49 percent in 2011 and has posted a 10 percent gain year-to-date.

Cramer thinks IACs stock has more room to run because the company has a proven ability to turn a profit. Match.com, for example, is a subscription-based business model that attracted 1.7 million core subscribers last quarter. In turn, Match.coms revenues were up 46 percent year-over-year last quarter.

(RELATED: 12 Unique Dating Sites)

Meanwhile, the company also has a strong search market, where search revenues increased by 35 percent year-over-year last quarter.

So IAC might not be as exciting as some of the red hot dotcom names out there, but Cramer thinks it will likely produce solid profits for your portfolio something every investor can get excited about.

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Cramer: IAC/InterActiveCorp Is a Buy

China's Growth Targets Slide — Shares of Sohu and Ctrip Fall

NEW YORK, NY--(Marketwire -03/08/12)- China's internet stocks have taken a beating of late. On Tuesday alone, TickerSpy's China Internet Stocks Index (CHDOT) collapsed more than 4 percent after Chinese officials cut the country's 2012 target growth rate to 7.5 percent -- the lowest year-on-year growth projection in eight years. The Paragon Report examines investing opportunities in China's Internet Sector and provides equity research on Sohu.com Inc. (NASDAQ: SOHU - News) and Ctrip.com International Ltd. (NASDAQ: CTRP - News). Access to the full company reports can be found at:

http://www.paragonreport.com/SOHU

http://www.paragonreport.com/CTRP

China's Premier called "expanding consumer demand" one of his priorities for the upcoming year. The move comes after a decade in which building vast infrastructure projects and boosting the country's exports took center stage in the Chinese economy, Reuters reports. Last year, China's gross domestic product (GDP), or annual economic output, grew by 9.2%. In 2010 gross domestic product grew 10.4%.

"I wish to stress that in setting a slightly lower GDP growth rate, we hope... to guide people in all sectors to focus their work on accelerating the transformation of the pattern of economic development and making economic development more sustainable and efficient," Premier Wen Jiabao explained.

The Paragon Report provides investors with an excellent first step in their due diligence by providing daily trading ideas, and consolidating the public information available on them. For more investment research on China's Internet Sector register with at http://www.paragonreport.com and get exclusive access to our numerous stock reports and industry newsletters.

In the internet sector, the number of people online in China stood at 513 million by the end of 2011, according to a recent report from eMarketer. Although the report predicts growth to slow, with the internet reaching a majority of people only by 2015, China still has the world's largest population exposed to online ads.

Despite a lack of Facebook, China's social networking population reached nearly 257 million in 2011. Meanwhile half of internet users have been attracted by local weibo and other domestic social networking sites, with the proportion expected to rise to nearly two-thirds by 2014.

The Paragon Report has not been compensated by any of the above-mentioned publicly traded companies. Paragon Report is compensated by other third party organizations for advertising services. We act as an independent research portal and are aware that all investment entails inherent risks. Please view the full disclaimer at http://www.paragonreport.com/disclaimer

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China's Growth Targets Slide -- Shares of Sohu and Ctrip Fall