Buy or Sell SINA Stock?

With shares of SINA Corporation (NASDAQ:SINA) trading at around $48.59, is SINA an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock’s Movement

SINA provides online media for news, sports, entertainment, financial information, and more. Its setup is similar to Yahoo! Inc. (NASDAQ:YHOO), but it’s based in China. However, SINA has something that Yahoo wishes it had, which is a micro-blogging site with 500 million users. It goes by the name of Weibo, and it’s often visited by celebrities, politicians, and more. Remember, Twitter is blocked in China. Therefore, Twitter isn’t a threat. New features are consistently being added to Weibo, including apps, virtual currency, and games. But the biggest news related to Weibo is that it’s about to launch its own online payment service. It will be called WeiboPay, and it’s expected to launch as soon as April. WeiboPay will give micro-bloggers an opportunity to buy items off the WeiboBay platform through merchants. It’s also important to note that SINA chose to go with its own ecommerce service opposed to partnering up. This is a sign of confidence in its own abilities, which is a sign of strength.

Weibo has seen tremendous growth over the past two years, and that growth is likely to continue. SINA will likely continue to search for other ways to monetize Weibo. But will Weibo be enough for SINA to compete with the likes of Baidu (NASDAQ:BIDU) and Sohu.com Inc. (NASDAQ:SOHU)?

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The chart below compares fundamentals for SINA, Baidu, and Sohu. SINA has a market cap of $3.23 billion, Baidu has a market cap of $30.75 billionm and Sohu has a market cap of $1.89 billion.

SINA

BIDU

SOHU

Trailing   P/E

103.21

18.48

24.40

Forward   P/E

30.90

12.97

14.22

Profit   Margin

6.00%

46.88%

8.17%

ROE

2.89%

47.73%

13.36%

Operating   Cash Flow

 N/A

N/A

$402.59 Million

Dividend   Yield

N/A

N/A

N/A

Short   Position

4.90

N/A

15.70%

 

SINA is currently trading at 103 times earnings. That doesn’t leave much margin for error. Let’s take a look at some more important numbers prior to forming an opinion on this stock.