Reviewing NetEase (NTES) & Intralinks (IL)

NetEase (NASDAQ: NTES) and Intralinks (NYSE:IL) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, risk, profitability and earnings.

Dividends

NetEase pays an annual dividend of $3.63 per share and has a dividend yield of 1.0%. Intralinks does not pay a dividend. NetEase pays out 25.1% of its earnings in the form of a dividend.

Profitability

This table compares NetEase and Intralinks’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NetEase	25.34%	31.84%	21.48%
Intralinks	-1.63%	-1.87%	-1.13%

Insider and Institutional Ownership

50.5% of NetEase shares are held by institutional investors. Comparatively, 91.2% of Intralinks shares are held by institutional investors. 54.7% of NetEase shares are held by insiders. Comparatively, 32.3% of Intralinks shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares NetEase and Intralinks’ top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NetEase	$5.50 billion	8.55	$1.67 billion	$14.47	24.59
Intralinks	N/A	N/A	N/A	($0.35)	N/A

NetEase has higher revenue and earnings than Intralinks. Intralinks is trading at a lower price-to-earnings ratio than NetEase, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and target prices for NetEase and Intralinks, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NetEase	3	4	7	0	2.29
Intralinks	0	2	0	0	2.00

NetEase presently has a consensus target price of $322.77, suggesting a potential downside of 9.28%. Intralinks has a consensus target price of $13.25, suggesting a potential upside of Infinity. Given Intralinks’ higher probable upside, analysts clearly believe Intralinks is more favorable than NetEase.

Summary

NetEase beats Intralinks on 9 of the 12 factors compared between the two stocks.

NetEase Company Profile

NetEase, Inc. (NetEase) is a technology company. The Company operates an interactive online community in China and is a provider of Chinese language content and services through its online games, Internet media, e-mail, e-commerce and other businesses. The Company operates through three segments: Online Game Services; Advertising Services, and E-mail, E-commerce and Others. Its online games business primarily focuses on offering personal computer (PC)-client massively multi-player online role-playing games (PC-client MMORPGs), as well as mobile games to the Chinese market. The NetEase Websites provide Internet users with Chinese language online services centered over three core service categories, which include content, community and communication. Its online advertising offerings include banner advertising, direct e-mail, sponsored special events, games, contests and other activities. It offers free and fee-based premium e-mail services to its individual users and corporate users.

Intralinks Company Profile

Intralinks Holdings, Inc. is a technology provider of software-as-a-service (SaaS) solutions for secure enterprise content collaboration within and among organizations. The Company’s cloud-based solutions enable organizations to manage, control, track, search, exchange and collaborate on sensitive information inside and outside the firewall. Its solutions enables its customers to manage electronic information, accelerate information-intensive business processes, optimize critical information workflows, meet regulatory and risk management requirements, and collaborate with business counterparties. The Company delivers its solutions through a cloud-based model, making them available on-demand over the Internet using a multi-tenant SaaS architecture. The Company serves enterprises and governmental agencies across a range of industries, including financial services, pharmaceutical, manufacturing, biotechnology, consumer, energy, legal, professional services, insurance and technology.

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