Auriga Has Buy Rating On Focus Media Holding (FMCN)

Auriga has a Buy rating and a $30 price target on Focus Media Holding Limited (ADR) FMCN. In a note sent to investors Auriga writes, "There was selloff of most China stocks yesterday with advertising stocks suffering the most, in our opinion: SINA (Buy) was down 3.7%, FMCN (Buy) down 5.2%, AMCN (Buy) down 4.1%, SOHU (Hold) down 4.9%, and JOBS (NR) down 5.4%. We believe the selloff is a reflection of concerns over the upward trend in inflation, potential rate hike as well as the potential slowdown in China's economy since this sector has direct correlation with economic growth. However, we believe that underneath the potential slowdown of China's economy, the domestic economy will continue its rapid growth, which can directly benefit these advertising stocks. While penalizing these stocks for potential slowdown in non-direct related areas like investment and trade is unfair, in our view, it creates an opportunity for investment for 2011. One of the stocks that we will focus on in this note is FMCN, which is trading at about 12X our 2011 EPS projection excluding cash." Shares of FMCN closed at $21.52 yesterday.