Wish List

For core holdings:

AAPL (tech/retail/electronics)
AMZN (retail)
ATVI (gaming)
AXP (credit card)
BIDU (China/search/advertising)
F (possibly the lone US automaker by 2010)
FLS (infrastructure)
GOOG (search/advertising)
GS (financial)
LVS (casino)
MCD (dining/international)
NTES (China/gaming)

Beanieville bulls update

One of my favorite blogs, Beanieville, was bullish on several stocks on April 3. Here's a look at how they've fared since.

AAPL +7.3%
AMZN even
AKAM +2.3%
AZO +4.6%
BIDU +12.3%
CRM +3.6%
FSLR +7.3%
GOOG +6.3%
MA -5.7%
NTES +11.6%
SNDA +13.7%
SPWRA +10.2%
STP +5.4%
V -3.3%
VMW +9.6%

Overall, on a weighted scale, these stocks are up 5.7%. Not bad for just two weeks! I like most of these, too, especially AAPL, BIDU, FSLR, GOOG, SPWRA, V and VMW. Not holding any of these yet, though. The risk/reward in these stocks is pretty favorable, held down only by the credit card guys (MA, V), and they'll recover eventually.

Le Beanieville Index*

Last week, one of my favorite bloggers, Beanieville, went bullish with his favorite stocks for the next run up. Here's a look at those stocks, their closing price that day, Friday's price and the percentage move since.

Beanieville's Bulls
AAPL 115, 119.57 +4%
GOOG 369, 372.50 +1%
VMW 28, 30.01 +7.2%
AMZN 78, 79.77 +2.3%
CRM 37, 37.40 +1.1%
AKAM 20, 20.20 +1%
BIDU 187, 190.32 +1.8%
SNDA 42, 46.41 +10.5%
NTES 27, 28.45 +5.4%
AZO 159, 161.72 +1.7%
V 60, 58.79 -2%
MA 173, 172.46 -0.3%
FSLR 134, 142.05 +6%
SPWRA 24, 26.04 +8.5%
STP 14, 14.40 +2.9%

Average: +3.4%

Why do I keep track? I like Beanieville's picks, for the most part. I've traded in and out of STP and will probably continue to do so later. I like just about all the stocks on his bull list, particularly AAPL, GOOG, VMW, BIDU, AMZN and FSLR (along with STP). This is one of the gauges I can use to see where the better entry points were, or have yet to come.

Munarritz on Google's many partners

My favorite Motley Fool writer, by far, is Rick Aristotle Munarritz. His interest in growth companies near and far never ceases, which is why I never miss any of his articles. Try not to, anyway. His latest piece includes Google and Baidu.

Munarritz: Little G in Big China

He mentions SINA in the story.

So where does this leave SINA (Nasdaq: SINA)? Two months ago, SINA hooked up with Google in a revenue-sharing search-advertising deal. The Chinese portal knew that it was getting into an open relationship, but did it know that Google was interested in seeing so many other people?

As it turns out, SINA has jumped from 35 to 40 in the past few days, probably because the Co is bullish on projected revenues due to its partnership with Google. He also mentions NetEase, though I wonder how strong the Co will be with its toes in several different businesses. I like Shanda Interactive as an online gaming destination better.

SNDA, CMG bumped down; SNDK a growth monster

Some minor changes and a nice addition to my lists of stock picks.

Shanda Interactive down from B+ to B due to government restrictions on online game "addicts". This nut has been getting screwed for awhile now, and last week, the hammer came down. Shanda (SNDA) will still thrive, but at a slower rate, particularly with intense competition from NetEase.

Chipotle Mexican Grill also down from B+ to B due to increased costs in cheese and avocados. Nothing more.

Spartan Motors? Great company, but the stock was priced for perfect execution. That didn't happen recently, when a key contract fell by the wayside. Down from A- to B+.

SanDisk is clearly in strength now with worldwide demand for flash memory growing. SNDK is a B+ here, and very close to an A-. P/E is 74, but growth will be monstrous.

Also like Starbucks as expansion into a robust Chinese economy continues. China's economy was up 11.9% in Q2 over '06 Q2, which means more spending money and more tea at SBUX. Moved SBUX up from B- to B.

The9 doing fine despite online gaming crackdown

A couple of weeks ago, I insisted that Shanda Interactive (SNDA) is poised to take the lead among China's online gaming companies.

For a short while, SNDA's stock took a baby step ahead while the NetEase (NTES) struggled. It didn't matter. Last week, the Chinese government put the hammer down on online gaming "addicts", enforcing an I.D. log-in requirement that limits gamers to 3 hours of play.

Both SNDA and NTES have sunk a bit since then. Shanda closed today down 3% to $31.09. NetEase finished 1% down to $17.66. The two companies are each valued at $2.2 billion.

Interestingly enough, The9 Limited (NCTY) continues to rise. The makers of World of Warcraft saw its stock rise more than 1% to $51.60 today. How does this happen? According to the International Herald Tribune, World of Warcraft appeals more to adult gamers than teens, and the government had its focus on curtailing the online play of teens.

I suppose an adult in China who plays 8 hours a day isn't as worrysome as a zombied-out teen. I've always thought that gaming can be addictive, but the alternatives for teens are a mixed bag. On the plus side, there are part-time jobs, i.e. make some spending money. There are creative projects that can be done today, like music production and digital video, that were unaccessible to the average teen 10, 20 years ago.

But the teen who has no incentive to be creative and wants only to play online is not exactly worse off. It's easy to get in trouble in real life for a teen who has time and idle hands. Mixed bag. Whatever the case, it'll be interesting to see how Shanda and NetEase respond to the new law.

Game On! Shanda ready to surpass Netease

Asia. Gaming. Growth.

Put them together and it's no wonder that small companies like Shanda Interactive are continuing to cast a spell over gamers and investors alike. Shanda (SNDA) acquired Chengdu Aurora recently, and is aiming wide for more. If Shanda does wind up spending $260 million to acquire more small companies, I'd have to wonder who is really the mover and shaker in China gaming.

NetEase (NTES) recently announced a major share buyback plan. This is fine and good for shareholders and the company, but unless NTES has serious ammo in the pipeline, where will growth come from? Will Netease allow Shanda to catch up in market share?

It's possible, no doubt. NetEase has its fingers and toes in wireless VAS and advertising services within its network, and is still aiming for portal significance. (Sina is the clear portal leader in China, however.)

Shanda, meanwhile, is primarily focused on online gaming, period. Numbers are robust: 52% profit margin, 31% operating margin, 41% ROE and accelerating EPS since 2005. Quarterly revenue is up 55%, and earnings growth was in four digits.

With only 20 million shares in the float, the stock has rocketed. One year ago, SNDA traded at $13. It closed today at $32.82.

NetEase, meanwhile, traded at $21 a year ago and closed today's session at $18.84. NTES, which has a market cap of $2.3 billion, has 57% profit margin and 58% operating margin, as well as 42% ROE. However, quarterly earnings (4%) and earnings growth (2%) are a concern, and EPS is stagnant ($1.14 in '06, projected at $1.15 in '07 and $1.23 in '08).

Like NetEase, Shanda's cap is also $2.3 billion, but the numbers support SNDA.

While they battle out for Chinese turf, Nintendo clearly has plenty of running room, even after a major ramp up this year on the shoulders of its hot ticket, the Wii. Electronic Arts (EA) and Gamestop (GME) will fare well in a solid US economy, but until proven otherwise, NTDOY.PK is clearly the king of gaming growth stocks.

Disclaimer: Pupule Paul has no position in SNDA, NTES, NTDOY.PK, EA and GME.