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Baidu, Inc. Message Board

  • llyoyd_londoner llyoyd_londoner Feb 18, 2007 10:56 AM Flag

    From Mortley fool, why go up

    Lifestyles of the niche and famous
    One of my favorite stocks is a company by the name of (Nasdaq: BIDU). I don't own it, but I have recommended it to Rule Breakers subscribers in the past. The stock got hammered on Thursday after reporting stellar results the night before. Yes, you read that right. It was a great fourth quarter for China's top search engine.

    Wall Street was looking for 136% in revenue growth and 255% in profit growth. Baidu nailed the top line and actually saw earnings per share soar 400% higher. Still, the stock took a hit, though it did begin to claw its way back throughout the trading day.

    What spooked investors into what was initially more than a 10% dip? Well, analysts were concerned that the company's revenue guidance for the first quarter wasn't up to snuff. Let's dig right back into that quarterly report. Did you see how profits outpaced revenue? That is margin expansion. The same analysts who can't realize that Baidu is squeezing $0.43 in profit out of every dollar in revenue suddenly think the company is vulnerable under a slower growth scenario. I've seen folks underestimate the paid-search leader in the slower-growing stateside market before, and Google (Nasdaq: GOOG) has done just fine. Good luck scaling that Great Wall of Worry again, Baidu.

    Until next week, I remain,

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    • very convenient of the motley foot to forget that bidu relied upon a tax benefit to beat q4 estimates.

      very conventient of motley foof to forget to mention baidu is going to sepnd millions on japan expanion which will offset operating leverage.

      very convenient of marley fart to forgot to mention that while year over year revenue is way up, quarter over quarter revenue growth is FLAT for the first time at BIDU in its brief history as a public company. everyone compares it to goog... when has goog been flat quarter over quarter on anything? it's easy in internet search to soar year over year. BIDU just proved it's no GOOG, but Mutley FOOK-UP didn't figure that out.

      Why is Motley FOOK a shill for BIDU? the author may not own shares, but maybe the Gardners do... maybe the author's aunt does? Someone does - the Motley Fool's subscribers who pay not only the author but Steve and Tom Gardner. The Motley write up sucked because of it left key facts out... distortion through parsing of facts, worse than outright lies.

      remember... and some are too dumb to realize this. motley fool is trying to make money through begging for money and getting you to buy a subscription. their site told people buy this stock a few months ago and now they've got disappointed subscribers. While they brag about owning no shares, they;ve got a worse conflict of interest in touting a stock they recommending to pissed off paying subscribers. Don't believe anything Motley Fool tells you.. It would be better if their authors actually did own the stocks they reported on - since they'd have something more at risk.

    • I am not a professional, but I can easily see that you have made two serious mistakes in your analysis.

      First, you seem to forgot that the price of this stock is built on the future growth, not the growth in the past. If you really want to pump this stock using past growth, then I suggest using 05Q3 earnings to compare. The result will be more convincing, as you can say something like "1400% growth in only 5 quarters" (sounds much better than 400% growth in 4 quarters, huh?). You can even go one step further to compare with 04Q4 earnings (negative earnings), and you will be able to shout something like "infinit growth in two years".

      Second, you seem to forgot that tax benefit should not be used to evaluate the company's earning growth. One good example is PALM. PALM received huge tax benefit in 06Q3. The yoy earning growth rate in Q3 was about 400%, after counting in the tax credit. However, nobody really cared about it and the stock was still traded around $15.00 with a ridiculous P/E of 4.8.

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