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Released on Monday, October 10, 2011, 8:00 AM ET

Pittsburgh, PA (SpeculatingStocks) - Here is an interesting stock for those of you interested in over-seas investments. Giant Interactive Group, Inc. (NYSE:GA) is China’s leading online-video and high-graphic massively multiplayer online games—such as American rival-company Blizzard Entertainment’s award winning and highly-lucrative MMORPG series World of Warcraft (a.k.a WoW)—and what’s better, they are in China…did we mention that?

With the Chinese cultural and economic revolution underway, thousands of Chinese are gaining access to the internet on a daily basis, and that means access to MMORPGs offered through Giant Interactive. Currently, Giant controls the largest section of the Chinese online video games market, with expectations of expansion; the company could have a large control on the region.

But just exactly how does this company make money? Well they construct these video games in such a way that they draw in the users and in some cases literally addict them to the online gaming world—for free. That’s right, GA’s video games are free-to-play, making them open to virtually anybody who can gain access to the internet. Now you might be thinking, well then that doesn’t sound lucrative at all, but what Giant does do is offer pay-to-use or pay-to-have content within the game, content any marginally advanced play will want to have.

Now lets take a look at the companies financials and technicals for a short moment. The stock is trading at $3.34 per share (10:00 PM EDT, October 7th, 2011), with a nice stable beta volatility of 0.95 and a strong volume movement of 1.4 million shares as a daily average. The company has a market capitalization of around $759 million, making it a small-cap stock. But it has a very nice current ratio of 5.38, and total cash per share of $4.21—yes that’s right, this company maintains more cash per share than their stock’s price—usually a strong indicator of an undervalued stock.  The book value per share is equally strong at $4.35.

Adding to this, a quick stochastic analysis indicates that the stock could be oversold at the moment, as it has been trading at the low end of momentum since mid-2010.  Giant’s 52-week range runs between $3.02 and $9.45 per share, hinting at just how high this stock could ultimately go.

But why does this stock seem to be trending down recently? Well part of the reason could be a decrease in EPS reflecting an increase in dividend returns. GA’s current EPS is 0.48 with a price that is approximately 7 times earnings, while its dividend returns have recently skyrocketed to over 86%!

So if this stock doesn’t look good because of its relatively low price and possibly oversold indicators, then the dividends should at least be appealing given this company’s future outlook in the technology sector of China. For investors looking to hedge against the European debt crisis and US reflective instability, you might want to take a look at Giant Interactive in China.

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