Should You Consider Adding Baidu (BIDU) to Your Portfolio?

·3 min read

Horos Asset Management, an investment management firm, published its fourth quarter 2022 investor letter. A copy of the same can be downloaded here. During the fourth quarter, Horos Value Internacional fund gained 13.7% compared to the benchmark’s return of 0.8% while the yearly return of the fund was 4.9% compared to a 13.0% decline for the benchmark. On the other hand, Horos Value Iberia gained 12.1% in the quarter and fell -5.2% in 2022, compared to an 11.9% gain over the quarter and a 2% rise in the year for the benchmark. In addition, check the fund’s top five holdings to know its best picks in 2022.

Horos Asset Management highlighted stocks like Baidu, Inc. (NASDAQ:BIDU) in the Q4 2022 investor letter. Headquartered in Beijing, China, Baidu, Inc. (NASDAQ:BIDU) is an internet search service provider. On March 17, 2023, Baidu, Inc. (NASDAQ:BIDU) stock closed at $146.84 per share. One-month return of Baidu, Inc. (NASDAQ:BIDU) was 3.62%, and its shares gained 0.11% of their value over the last 52 weeks. Baidu, Inc. (NASDAQ:BIDU) has a market capitalization of $50.741 billion.

Horos Asset Management made the following comment about Baidu, Inc. (NASDAQ:BIDU) in its Q4 2022 investor letter:

"As I mentioned at the beginning of this quarterly letter, we took advantage of the meltdown in technology platforms to initiate new positions in companies in which we had already been shareholders in the past and whose valuation did not, until now, provide a sufficiently high margin of safety. Such is the case of PayPal and Baidu, Inc. (NASDAQ:BIDU).

In the case of Baidu, as many will know, it is known as the "Chinese Google". The company has been the leading Internet search engine in the Asian country for years, which has given it a historically privileged position to monetize, through online advertising, a huge user base. However, the rise of two types of applications has called into question the sustainability of its business model. On the one hand, mobile social apps, such as ByteDance's well-known TikTok, have emerged as a new model of online consumption, generating a new platform through which to monetize Internet users. On the other hand, even more disruptive in the long term, is the emergence of the so-called super apps: a sort of virtual Swiss Army knives that allow users to access many products and services without having to leave their interface at any time, making Baidu's traditional search engine less attractive. In this field, Tencent (with its super app Weixin/WeChat), Alibaba (Alipay) and Meituan certainly stand out. These two factors have caused Baidu's online advertising market share to drop from 17% in 2017 to less than 7% estimated for 2022.34 To this deterioration, we should add the collapse in market value of its stake in iQiyi (video platform controlled by Baidu) and its equity holdings such as (hotel and flight platform) …” (Click here to read the full text)

Baidu Inc (ADR) (NASDAQ:BIDU), Icon, app, Symbol, Sign, logo, smarphone
Baidu Inc (ADR) (NASDAQ:BIDU), Icon, app, Symbol, Sign, logo, smarphone

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Baidu, Inc. (NASDAQ:BIDU) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 40 hedge fund portfolios held Baidu, Inc. (NASDAQ:BIDU) at the end of the fourth quarter which was 43 in the previous quarter.

We discussed Baidu, Inc. (NASDAQ:BIDU) in another article and shared the list of best augmented reality stocks to buy. In addition, please check out our hedge fund investor letters Q4 2022 page for more investor letters from hedge funds and other leading investors.


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