NetEase (NASDAQ:NTES) Shares Gap Down - Here's Why

Key Points

• NetEase shares gapped down from a previous close of $127.89 to open at $122.00, trading around $124.42 afterward.
• Analyst sentiment remains broadly positive, with seven Buy ratings and three Holds; the stock has a “Moderate Buy” consensus and an average price target of $158.38.
• NetEase pays a quarterly dividend of $0.72 per share, equivalent to a 2.3% yield, while its general counsel recently sold 10,000 shares.

Shares of NetEase, Inc. (NASDAQ:NTES - Get Free Report) gapped down prior to trading on Wednesday . The stock had previously closed at $127.89, but opened at $122.00. NetEase shares last traded at $124.4230, with a volume of 144,862 shares trading hands.

Wall Street Analysts Forecast Growth

A number of research analysts have commented on NTES shares. Zacks Research downgraded shares of NetEase from a "strong-buy" rating to a "hold" rating in a research report on Monday, July 27th. Benchmark reissued a "buy" rating on shares of NetEase in a report on Friday, May 22nd. Weiss Ratings lowered NetEase from a "hold (c+)" rating to a "hold (c)" rating in a report on Tuesday, August 4th. Morgan Stanley reaffirmed an "overweight" rating and set a $158.00 target price on shares of NetEase in a research report on Tuesday, May 26th. Finally, Wall Street Zen downgraded NetEase from a "buy" rating to a "hold" rating in a report on Sunday, August 2nd. Seven investment analysts have rated the stock with a Buy rating and three have issued a Hold rating to the stock. According to data from MarketBeat, the company currently has an average rating of "Moderate Buy" and an average price target of $158.38.

NetEase Stock Down 3.2%

The company's 50 day simple moving average is $126.48 and its two-hundred day simple moving average is $120.90. The company has a market capitalization of $79.29 billion, a price-to-earnings ratio of 16.45, a P/E/G ratio of 1.73 and a beta of 0.73.

NetEase Cuts Dividend

The firm also recently announced a quarterly dividend, which was paid on Thursday, June 18th. Investors of record on Friday, June 5th were given a dividend of $0.72 per share. This represents a $2.88 annualized dividend and a yield of 2.3%. The ex-dividend date of this dividend was Friday, June 5th. NetEase's dividend payout ratio is currently 38.11%.

Insiders Place Their Bets

In other NetEase news, General Counsel Paul William Boltz, Jr. sold 10,000 shares of the firm's stock in a transaction dated Monday, June 29th. The stock was sold at an average price of $128.30, for a total value of $1,283,000.00. Following the completion of the sale, the general counsel owned 12,223 shares of the company's stock, valued at approximately $1,568,210.90. This trade represents a 45.00% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Corporate insiders own 54.70% of the company's stock.

Institutional Inflows and Outflows

A number of hedge funds have recently bought and sold shares of the stock. Mitsubishi UFJ Trust & Banking Corp lifted its position in NetEase by 22.1% during the 4th quarter. Mitsubishi UFJ Trust & Banking Corp now owns 67,211 shares of the technology company's stock worth $9,250,000 after acquiring an additional 12,173 shares during the period. Institute for Wealth Management LLC. acquired a new position in shares of NetEase in the fourth quarter valued at about $3,491,000. Ninety One North America Inc. raised its stake in shares of NetEase by 3.4% in the fourth quarter. Ninety One North America Inc. now owns 500,241 shares of the technology company's stock worth $68,843,000 after purchasing an additional 16,496 shares during the last quarter. Lazard Asset Management LLC lifted its holdings in shares of NetEase by 64.2% during the first quarter. Lazard Asset Management LLC now owns 581,720 shares of the technology company's stock worth $65,118,000 after purchasing an additional 227,433 shares during the period. Finally, Assetmark Inc. lifted its holdings in shares of NetEase by 169.5% during the fourth quarter. Assetmark Inc. now owns 130,869 shares of the technology company's stock worth $18,010,000 after purchasing an additional 82,312 shares during the period. Institutional investors and hedge funds own 11.07% of the company's stock.

About NetEase

NetEase, Inc NASDAQ: NTES is a Chinese technology company headquartered in Hangzhou that develops and operates Internet services and products. Founded in 1997 by William Ding (Ding Lei), the company has grown from an early web portal and e-mail provider into a diversified online services group. William Ding has served as the company's founder and long-time leader, guiding its expansion into games, digital content and consumer services.

The company's primary business is interactive entertainment: NetEase Games designs, develops and publishes PC and mobile games for domestic and international audiences, offering a mix of self-developed franchises and titles published under licensing and strategic partnerships.

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