Najarian also suggests Sina (SINA) and Shanda Interactive (SNDA) which provide content, largely for an Asian audience.

Next on the list is Shanda Interactive Entertainment. The Shanghai-based internet entertainment company recently increased its buyback plan from $200 million to $300 million. This amount includes $175 million in ADSs the company agreed to repurchase in an earlier buyback plan.

The internet video game company reported strong third quarter results on December 1, 2008. Total revenues increased to a record $137.3 million, 42.7% better than the year-ago period and 11.8% better than the previous quarter. Operating income jumped 50% from the same period last year to a record $56 million. Diluted earnings per ADS came in at 68 cents a share.

"We are pleased to report another solid quarter despite the global financial turmoil," said Tianqiao Chen, Chairman and CEO of Shanda. "Our third quarter results demonstrate the strength, breadth and balance of our company, as our 3C strategy continued to deliver. We are confident that the online entertainment industry will be more resilient through the economic cycle.”

After Shanda’s third quarter results beat expectations, analysts from Needham had positive things to say. They believe Shanda is well positioned to weather a slowdown in the Chinese economy. Online games are a cheap form of entertainment; therefore online games will be less sensitive to the economy than other industries.

Analyst Mark May added, “We believe Shanda, with its history of strong execution and industry leading pipeline is in a prime position to take advantage of the strong secular growth trends in online gaming in China.” Needham has a buy rating and $45-dollar price target on SNDA.

Another bullish note for Shanda is that Citadel Investment Group sees upside potential. Citadel is a $20 billion dollar Chicago-based hedge fund founded by billionaire trader Kenneth C. Griffin, and is one of the world's largest hedge funds. Citadel boasts, “Through a combination of world-class talent and the use of advanced technology to support them, we relentlessly seek to initiate and capitalize on change in the global financial markets with the goal of remaining at the forefront of the industry.” Their other top stock picks are Apple and News Corp.

So we have an increased buyback plan, record third-quarter earnings, a buy rating, and a legendary firm owns the stock. It may be time to add Shanda to your portfolio.

got in early on the chance that the online gaming industry in China would take off, and it did.

China Watch: Shanda's Got Game:
Standard & Poor's equity analyst Scott Kessler named online gaming one of the top two tech trends in China right now -- and says Shanda Interactive Entertainment is the stock to buy.

Click here to watch the video.

China Watch: Online Gaming for Rest of Us
The online gaming industry is huge in China. Patrick Schultz says the best bet for investors who don't quite understand it is to own lots of different online gaming companies.

Click here to watch the video.

China games top rated

GOOD FINANCIALS AND FOREIGN INCOME

Baidu, The Key to All China Internet Stocks
Despite wide-ranging differences, Chinese Internet stocks trade as a monolith because of the early stage of the market, Patrick Schultz tells Vishesh Kumar.

Click here to watch the video.

cheap China

China gamer play