Why China Mobile Games Shares Popped Today

Is China Mobile Games' jump meaningful? Or just another movement?

May 19, 2014 at 7:14PM

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of China Mobile Games & Entertainment Group Ltd. (NASDAQ:CMGE) rose nearly 10% Monday after analysts initiated coverage on the stock with a "buy" rating and $32 price target, or a 58% premium to today's close.

So what: Specifically, Nomura Securities analysts Chao Wang and Liz Guan suggested China Mobile Games' data mining abilities, extensive pre-installation network, and operation and game development experience help differentiate it among its peers. This should help China Mobile Games to increase its mobile game retention rate going forward.

Now what: Today's initiation also arrives on the heels of China Mobile Games' significantly better-than-expected Q1 results, which resulted in a 12% pop on Friday. In the report, China Mobile Games stated revenue increased 488% year over year to $34.5 million, which helped it swing from a loss in the same quarter last year to an adjusted profit of $0.21 per share. As it stands, I'm sticking by my call that China Mobile Games should be able to reward patient investors from here as it continues pursuing profitable growth.

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

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This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

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KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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