Sina.com jumped another 5.46% yesterday as China enjoys its own version of a second Internet bubble. This put your remaining options in Sina.com 335% in the money. With the stock having gone parabolic, let’s strike while the iron is hot and sell the last of your options to lock in these gains. But hold on to the stock for now, as we’ll be looking to add new option positions in Sina.com when the stock pulls back.
After all, Sina.com still is trading at an “insanely rational” valuation of 10.8 times earnings, despite doubling since Feb. 1. That compares with rival Baidu’s P/E of 89.9. But it’s actually Sina that’s the biggest player in the online display ad market, and it also has Sina Weibo, the Chinese version of Twitter, which, like YouTube, is blocked in China.
Expect to hear more about Sina.com from other financial advisors who are joining the party late.
Meanwhile, your position in Bank of Ireland (IRE) is now up 65% since last Monday. You may see a pullback in the stock today as rating agency Fitch downgraded Ireland for the second time in two months, citing the higher cost of propping up the banks and the country’s weakening economy.
I see something different. The number of job seekers in Ireland is falling. Prices, rents and unit labor costs also have fallen. Industrial output is rising and exports are up. Having attracted more U.S. investment than the BRICs (Brazil, Russia, India and China) combined, Ireland isn’t going anywhere.
This is a fun, fun stock if you like real, live drama. Enjoy the ride.