Thursday, July 29, 2010

AsiaInfo- Oversold, Take Advantage

Shares of AsiaInfo Holdings (ASIA) fell 23 percent in the first hour of trading on Thursday, following the release of 2010 Q2 earnings. The company reported in-line top line growth but missed EPS target of $0.36 by 7 cents.

Looking at the cold numbers, AsiaInfo Holdings (ASIA) doesn't look as bad. The company reported revenues of $65.6 million for the second quarter, an increase from previous quarter. But the problem is with earnings per share or EPS. The company delivered GAAP earnings of $0.29/share vs. consensus estimates of $0.36/share.

Another difficulty is the interpretation of the outlook. The company will consolidate books of Linkage as of the next quarter, throwing off current growth chart. These two handicaps certainly contribute to the twenty plus percent drop in stock value.  The intergation of Linkage is definitely costing ASIA much more than the comapny and analysts first expected, but this acquisition will help in the long haul.

I say that you can buy a little of ASIA right here.  The stock has traded sideways for the past one and a half hours- which appears could be a bottom in today's trading.  

AsiaInfo (ASIA) 20.01 -5.99(-23.02%)  52wk 15.55-32.60 

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