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Baidu (BIDU) Has Risen 17% in Last One Year, Outperforms Market

Alex Smith
·3 mins read

If you are looking for the best ideas for your portfolio you may want to consider some of GDS Investments top stock picks. GDS Investments, an investment management firm, is bullish on Baidu Inc (NASDAQ:BIDU) stock. In its Q2 2019 investor letter – you can download a copy here – the firm discussed its investment thesis on Baidu Inc (NASDAQ:BIDU) stock. Baidu Inc (NASDAQ:BIDU) is a Chinese multinational technology company.

In July 2019, GDS Investments had released its Q2 2019 investor letter. Baidu Inc (NASDAQ:BIDU) stock has posted a return of 17.1% in the trailing one year period, outperforming the S&P 500 Index which returned 11.4% in the same period. This suggests that the investment firm was right in its decision. On a year-to-date basis, Baidu Inc (NASDAQ:BIDU) stock has fallen by 2.6%.

Let’s take a look at comments made by GDS Investments about Baidu Inc (NASDAQ:BIDU) stock in the Q2 2019 investor letter.

"With China on the mind, we turn to Chinese internet search firm Baidu, Inc. (NASDAQ: BIDU). At a price of approximately $115.00 per share, the company’s stock is at a 6-year low after it reported its first ever publicly-traded quarterly loss.

Interestingly, that loss is largely attributable to one factor: the company’s higher-than-normal operating costs during the first quarter when Baidu served as the main sponsor of the 2019 CCTV Chinese New Year Gala. In terms of television viewership, that gala is something like producing ten Super Bowl-level events all at one time. In a win for the company, though, and despite the high costs it incurred, Baidu doubled its daily active users. That, of course, should lead to better top-line results in the future.

To the extent other factors influenced the unexpected weakness in Baidu’s bottom-line results we can point to the company’s 58% ownership in iQIYI, Inc. (NASDAQ: IQ), a Netflix-like on-demand video streaming service and 19% ownership of Ctrip (NASDAQ: CTRIP). Collectively these two holdings comprise roughly 30% of BIDU’s current market capitalization.

With clear leadership in search, video streaming, AI and autonomous vehicle technology, Baidu is one the best and cheapest ways to gain access to these emerging growth technologies. Though the YTD performance of this company is disappointing, we remain optimistic about its long-term prospects."

Baidu Inc (ADR) (NASDAQ:BIDU), Logo, Sign, Symbol, isolated, website
Baidu Inc (ADR) (NASDAQ:BIDU), Logo, Sign, Symbol, isolated, website

360b / Shutterstock.com

In Q2 2020, the number of bullish hedge fund positions on Baidu Inc (NASDAQ:BIDU) stock remained unchanged from the previous quarter (see the chart here). Our calculations showed that Baidu Inc (NASDAQ:BIDU) isn't ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds' poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. You can subscribe to our free enewsletter below to receive our stories in your inbox:

Disclosure: None. This article is originally published at Insider Monkey.