By Paul Goodwin, Editor of Cabot China & Emerging Markets Report
From Cabot Wealth Advisory 9/8/11 Sign up for free Cabot Wealth Advisory e-newsletter
One interesting candidate for this kind of nickname is Jiayuan.com (DATE), which apparently wants to be the Match.com of China. Founded in 2003, but only beginning paying operations in 2008, the company's online dating platform offers free registration on jiayuan.com and even allows registrants to search through its entire database without charge.
If the search turns up someone that the registrant is interested in, he/she can even send an initial message to the interesting party.
But in order for the person who gets the message to read it, someone--either the sender or the receiver--has to pay for a number of virtual stamps.
Making sense of revenue and earnings trends for a company this young is tough, as growth from an extremely low base is unreliable. Still, it's hard not to be impressed by the 1,000% earnings growth (from one cent to 11 cents per share) in Q2, or the 132% revenue growth for the quarter that followed three quarters of growth in excess of 200%.
Critics have dinged Jiayuan.com for encouraging one-night stands, for posting fake profiles, for serving as a front for prostitution and for deceptive sales practices, and these charges have kept a lid on DATE. Some of these charges have also been aimed at other dating sites. And it's entirely possible that some of the charges are true. Cutting ethical corners and bending rules is rife in the online dating world.
But what I like most about Jiayuan.com (aside from the astonishing addition of over a half million new users per day!) is the chart for DATE, which shows huge volatility following its mid-May IPO. The stock ripped from 10 to over 15 in a couple of weeks, then dipped to near 9 in June, then headed back to 15 in July.
Now, however, DATE is calming down, losing amplitude in its swings and flattening out near 13. A few weeks of quiet trading will do the stock a heap of good, and it will make any breakout, especially one accompanied by a surge in volume, really stand out.
I have DATE on my personal watch list, and may add it to the watch list for Cabot China & Emerging Markets Report if it continues to show technical strength. The exciting story and explosive fundamental growth are already there.
Editor's Note: Learn more about top Chinese and emerging markets stocks in Cabot China & Emerging Markets Report. Hulbert Financial Digest recently named it the #3 investment newsletter for five-year performance! With an annualized return of 15.7% for the five years ending July 30, Cabot China & Emerging Markets Report is stomping versus the Wilshire 5000's paltry 3.0% gain during that period. Click here to learn more.
Emerging Markets Specialist, Analyst and Editor of Cabot China & Emerging Markets Report
A researcher and writer for over 30 years, Paul Goodwin has been a member of the Cabot investment team and editor of Cabot China & Emerging Markets Report since 2005. Under Paul’s stewardship, Hulbert Financial Digest rated Cabot China & Emerging Markets Report the number-one-rated newsletter of 2006 with a 78.6% gain for the year, the number-one-rated newsletter of 2007 with a 74.1% return, and the top-performing investment adivsory for five years with a 17.9% annual return.
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