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Is another $4 plunge excessive for JOBS?

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eye August 8, 2011 (Chinavestor) Investors of 51job Inc. (NASDAQ:JOBS) needed a strong stomach following 2011 Q2 earnings release. Shares of the Company tumbled from $58 all the way to $52 on Friday before recovering to $57.01 by the end of the trading day. And if the wasn't enough, shares tumbled 7% or $4.00 by 10:00 on Monday morning.

51job Inc. (NASDAQ:JOBS) August 2-8, 2011

JOBS_201188

Source: Reuters.com

One may argue that 51job Inc. (NASDAQ:JOBS) is in line with the rest of the sector. Baidu.com Inc. (NASDAQ:BIDU) lost 11.15%, Sohu is down 12.44% and Sina is off 12.07% on the same time.

BIDU_JOBS_201188

Source: finance.google.com

A quick comparative analysis thus suggests that investors of 51job Inc. (NASDAQ:JOBS) has no special reason to worry. This takes us back to fundamentals.

51job Inc. (NASDAQ:JOBS) reported a 26.7% top line growth YoY at the high end of previous guidance. And while gross margins grew along with revenues from the most profitable online advertisement segment, net income actually fell from previous quarter. Some argue that had it been not for share based compensation and currency losses, the Company would have bet expectations big time.

JOBS_2011Q2_revearnings

The Company issued a bullish revenue outlook for the third quarter however bottom line growth, after share based compensation and currency losses, is not all that impressive on a QoQ basis.

But considering that March 2011 was an exceptionally sound quarter, net income growth for the long haul looks impressive. This is what investors finally realized when sent the stock just $1 lower on Friday. It may be time to calm down after giving JOBS a second thought.



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