Alright, I'm pretty heavily weighted w/ Bidu here....have had a fairly heavy position for awhile. I really believe in the company and the future growth in China, but my question here is......how low do we go? I've been buying all of the way down, but really thought we had bottomed around 86. What are we looking at on downside from here? Thanks in advance for legitimate responses with why you feel this way. I welcome respectful shorts opinions too!
BIDU - I have mixed feeling about this stock. Following are the strength and weakness in my opinion:
1) Strong growth each year (I only take the latest 5-year financial data)
RevenueGrowthByYear: [2012: 53.8%][2011: 83.2%][2010: 78.0%][2009: 39.1%][2008: 83.3%]
NetIncomeGrowthByYear: [2012: 57.5%][2011: 88.3%][2010: 137.4%][2009: 41.7%][2008: 66.6%]
GrossMarginByYear: [2012: 79.5%][2011: 81.0%][2010: 72.8%][2009: 63.6%][2008: 63.8%]
EquityGrowthByYear: [2012: 70.4%][2011: 81.9%][2010: 76.8%][2009: 53.9%][2008: 52.8%]
2) Forward PE is 13.2 vs. current PE 18.8
3) Beat estimate most of the time
4) Institution held % is 63%
1) 2012 growth is much slower than 2011.
2) Price to Book value ratio is high: 13.05
Therefore, the stock's price movement depends on BIDU's growth. If 2013 would be a recovery year, maybe BIDU's growth will improve. Nevertheless, it is still a growing and very profitable company with financial institution holding of 63.2% per Yahoo website. I think financial institutions will start accumulation again soon.
I bought at 70 prior to split and sold half my position at above 120. I bought recently at 87. QIHU is not competition and it will get exposed eventually. BIDU will have another HUGE and MASSIVE run in the not too distant future. I think we could see $500 again n 2-3 years. As soon as they can figure out Mobile and start raking in money from CLOUD Computing/Storage; the returns will be massive again. Be patient. No worries here. Don't listen to the naysayers. This is a solid company with a bright future!
Sentiment: Strong Buy
volume was quite a bit higher today than normal. does that mean there is more interest in buying this stock? i am assuming that every sell has a buy attached to it so the spike in volume bodes well.
Qihu is a better investment. It is taking market share away from Baidu. According to CNZZ, Qihu had 10% market share in Dec and then 12.36% in FEb at the expense of Baidu. The CEO of Baidu has become complacent, and has lost his mojo...
Sentiment: Strong Sell
Every professional stock broker will tell you to never buy down. There are thousands of stocks and you can find other stocks to invest in. As far as BIDU, if you are long-term, I would hold but definitely do not buy anymore. CNBC said it was way oversold today. But since it's a Chinese company, anything can happen. Heck, China is a communist country. It can shutdown the internet at any time, especially if there is another college uprising like in the 80s. And then you have SEC suspicions with Chinese companies. I would invest elsewhere, after recovering some of your losses. But I wouldn't invest much money in a company in a communist nation no matter what.
QIHU's CEO is the former CEO of Yahoo China. And guess what happened in 2005 August? BIDU IPO in NASDAQ and Yahoo China fired it's CEO because he led Yahoo China from the #1 search engine into the bottom of the list. Then BIDU went on the take the #1 search engine title in China up until today. In terms of management, BIDU is more superior than QIHU. In terms of search technology, BIDU is more superior. QIHU get to where it is today by dirty tricks and is now being sue by BIDU for copyright infringement.
Bidu should see $120 easily end of 2013. Robin is smart and he likes to be wealthy! The company is continually looking for new customers... the latest is (British Brands). Bidu is not stopping at all, they are continually innovating. The internet in China has approx 450M online and China is putting lots of money into infrastructure such as airports, high speed rail...etc... This is a nice buying opportunity at such a oversold P/E ratio. Within 3 years i see this stock doubling to $170 and maintaining a 20 trailing p/e with an EPS of about 8.5
I'm in heavy as well: 6,000 at 115... After watching the 60 minutes report on the housing crisis in China, I have to wonder when it's all going to implode. They have whole cities that are empty... My gloomiest predicition is 40 (yeap that's 40) which is the high back in 2008 / 2009. If the charts are correct a 75% drop from the high of 160. It's that last true "shoulder". Maybe 74... don't know. I realize the China is growing at 8%, but if all those "middle class" people loose their life savings because everything they own is in real estate, then watch out is all I can say. I truly believe in Baidu. They are expanding into Africa, as well as travel, games, etc. However, if people stop spending money and the whole world goes into a second dip (like 1975) then its going to be another 2 years before we see a recovery...
chinese stocks are horrible this year, and Bidu is no exception. Chinese govt heavy hand on internet is a big obstacle then you have these little upstarts trying to unseat Bidu like Qihoo. Just too many negative factors overall. I sold bidu awhile back and never looked back. Took my lumps and put it elsewhere, mainly US stocks. Apple is cheap here, #$%$ CEO Cook but if they do anything positive, stock should pop.
I feel your concern. I'm buried with 3000 shs at 120. I bought too high obviously but at the time analysts were targeting 160. I don't know where the bottom is but I think with time(this year or next) Bidu will recover. This stock reminds me of GOOG and AAPL and NFLX. Remember when analysts were bashing NFLX all the way to 60 but it has recovered to180. Analysts bashed GOOG last year saying it won't grow any more and now it's at 800. Same with AAPL. Analysts said it was going to 1000. Now they have bashed it to 440 from 700. The analysts have now bashed BIDU all the way down when they used to praise it. Bottom line, don't listen to the analysts. They are terrible and I have finally learned a hard lesson. Watch the trend and hopefully buy low enough to make some money. Good luck to all the Bidu investers!
S&P and JPMorgan still rate bidu as a strong buy, as well as other analysts; even they can't always get it right. I remember when S&P had CitiGroup rated 5 stars- what a disaster! I wonder if that analyst lost his job over that one. Looking at valuation metrics, with a PEG around 0.5, PE of 18, F P/E of 14, domination in the market, and internet penetration in China still growing, I think it's an excellent risk/benefit investment. Don't be over-weighted in it like I am. I'm not losing sleep over it but I'm watching it like a hawk- too much. Next earnings announcement April 22. If no problems, it should pop from there.
Excellent investment stock for the future. It is cheaper than Google at these prices so I think You are fine. I own 1000 shares bought at $ 87.50 and not losing ANY sleep ! Back to $ 95 - $ 110 in a few months