Why NetEase, Inc. Surged 20% in February

By Joe Tenebruso Markets Fool.com

What happened

Continue Reading Below

Shares ofNetEase (NASDAQ: NTES)popped 20.1% last month, according to data provided byS&P Global Market Intelligence, as the Chinese internet technology company's strong fourth-quarter earnings report was applauded by investors.

Image source: Getty Images.

So what

Revenue surged53%year over year, to 12.099 billion Chineserenminbi (RMB), or roughly $1.74 billion. The gains were broad-based, with NetEase enjoying solid sales increases across its product lines.

"Led by mobile games, we saw year-over-year net revenue increases in the fourth quarter of 62.8% from online games, 9.2% from advertising services, and 38.2% from our email, e-commerce and others segment," said CEO William Ding in a press release.

Continue Reading Below

Helping to fuel this growth is NetEase's impressive ability to pump out popular new games.

"With more than 40 new mobile titles in 2016, we have introduced a number of chart toppers toChina'sthriving mobile market," Ding said.

All told, adjusted net income was $4.30 per diluted American depositary share (ADS), representing year-over-year growth of 68%. In turn, NetEase's board of directors approved a nearly 30% increase in its quarterly dividend to $1.01 per share.

Now what

NetEase's shares have pulled back about 5% so far in March, but the stock still fetches about double what it did just one year ago. Long-term shareholders have been even more well rewarded, with NetEase's stock up a dazzling 1,470% over the last decade. And with thealready-massive global video game market likely to only grow larger in the coming decade, it appears more good times are ahead for NetEase -- and its investors.

10 stocks we like better than NetEase
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now...and NetEase wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of February 6, 2017.

Joe Tenebruso has no position in any stocks mentioned. The Motley Fool recommends NetEase. The Motley Fool has a disclosure policy.