Spreads are something you find in stock trades, buffet tables, and your grocer's margarine aisle, but now China's GigaMedia
The company is teaming up with Victor Chandler International Group to launch Everest Bets, expanding GigaMedia's online gambling empire. GigaMedia is already a force in online poker through Everest Poker as well as other virtual casino offerings.
Investors typically think of companies like NetEase.com
Online wagering is taboo domestically, but it's a booming industry in Asia and Europe.
Gambling stocks have been a gamble lately. Casino operators MGM Mirage
GigaMedia hasn't been much of a shareholder treat, either, though investors are eating up this morning's expansion news. The stock opened with 5% higher and was sporting a gain as high as 13% a few minutes into the trading day.
The difference between struggling casino companies and an online player such as GigaMedia is that the latter is still heading in the right direction, fundamentally. Revenue and non-GAAP earnings rose by 16% and 22%, respectively, at GigaMedia in its latest quarter. That isn't too shabby for a stock trading at just seven times next year's projected profitability.
In other words, gambling may be the company's business, but investors aren't taking much of a gamble at these ridiculously low prices.
Other playful diversions for your eyes:
GigaMedia is a Motley Fool Global Gains pick. CryptoLogic is a Motley Fool Hidden Gems recommendation. Shanda Interactive Entertainment, Netease.com, and GigaMedia are Motley Fool Rule Breakers recommendations. Try any of our Foolish newsletter services free for 30 days.
Longtime Fool contributor Rick Munarriz has been a fan of China's growth stocks for several years now, even though he does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.