Should I Sell My Sina Shares?

I have accumulated a few hundred shares of Sina (SINA) over the years, bought anywhere between $25 and $31. Now it’s pushing at a 52-week high of $44. The mean 1-year target is about $40, so it has broken one of my main rules of investing: sell a stock if there are no extraordinary reason why it’s dangerously close to flirting its 1-year target. In this case, it’s above it!

Do I see any extraordinary reason to break a rule? Yes. Sina is a leader in China, but that’s not extraordinary, that comes with the P/E it commands. I do see SINA as a M&A target - who isn’t, after all, these days? Yahoo! (YHOO) owns 40% of Alibaba, which could prove to become a financial and strategic windfall, but that means there are many parties looking at Sina as a potential business or corporate partner.

Why sell?

On the one hand, indeed, China’s market is looking awfully like where the Nasdaq was in 2000:

Graph from WSJ.com.

But check this next graph out, and tell me if I’m crazy?

Graph courtesy of ZealLLC. 

But the flip side is that despite China’s problems, it’s still a promising market and Sina is amongst the blue-chips of Web media in the country. Today for example, the stock is about $1 (at present time) or 4%, and volume is not even high, it’s at 40% of the average volume, suggesting there are a lot of buyers.

I’m thinking of either selling a portion or everything, but I only have 500 shares.

Yet every time I login my trading account, I realize that I should be getting out of the US market and into international. Of course, if history is any lesson, then by 'international', I’m not sure I should be thinking China.

What would you do?

Disclaimer: Long Sina at present time.

Comments

[borisb]

keep it because online banner and search in china currently total $1 billion-ish and there is a land grab for the next $3-$4 billion. obviously baidu is going to gooble up search, but with the "comprehensive deal" with Google, Google is in Sina's corner,
(what a partner!) Sina should secure $1 billion piece.

2007 Jul 06 09:23 AM

[Siwei Zhong]

the peak would be around Olympics next year for all these internet media stocks. I would keep it if I were you.

2007 Jul 11 05:06 AM

[Ashkan Karbasfrooshan]

Siwei, that is a pretty good observation. I can just imagine the folly and euphoria then.

2007 Jul 11 02:30 PM

[borisb]

the sequentials and guidance were sluggish softy and the dip expands into the $7s during afterhours on earnings day into the $39s down from $47. i guess with the volitility the 39s has potential to be a low point..... further reinforced if indexs stablize and rebound.

2007 Aug 06 09:48 PM