James Altucher Says Giant Interactive Is The Cheapest Stock In China (GA)

James Altucher has written an article on Giant Interactive GA, and has called it the cheapest stock in China, based off financial metrics. Altucher is long GA and gives reasons why he thinks it's a double from here, and why he is long the stock. Altucher notes that the company has $860 million in cash with 0 debt. It has a $1.5 billion market cap, and if you back out the cash, it trades at 5 times next years earnings. GA owns 25% of 51.com, which could be "facebook of China". 51.com has 160 million users, and could potentially be worth a few hundred million. If that's the case, the core business, according to Altucher is being valued at 0. Goldman Sachs just came out with a report that put a $9 price target on the company. The stock has been flat since the report, and currently has a 2.5% dividend yield, whereas other Chinese internet companies offer nothing in the way of dividends. Altucher goes on to discuss the company's financials, saying it's actually very strong. According to Altucher, "They generated $122mm in EBITDA over the past 12 months. Revenue grew 17% year over year last quarter. They just launched a new game, ZT2, and the test results are going very well with 280k peak concurrent users over the past seven days. They have some good shareholders: Renaissance Technologies, one of the best hedge funds ever, owns over 1mm shares. they are doing a $110mm share buyback, buying back almost 9% of the company, which will further increase its earnings per share." Here is the entire article from James Altucher. Disclosure: no position in GA