Are Investors Undervaluing Baidu (BIDU) Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is Baidu (BIDU). BIDU is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 12.12, which compares to its industry's average of 22.74. Over the last 12 months, BIDU's Forward P/E has been as high as 16.49 and as low as 7.05, with a median of 11.42.
Finally, our model also underscores that BIDU has a P/CF ratio of 10.56. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 18.40. Over the past 52 weeks, BIDU's P/CF has been as high as 49.26 and as low as 6.25, with a median of 11.60.
If you're looking for another solid Internet - Services value stock, take a look at 21Vianet Group (VNET). VNET is a # 2 (Buy) stock with a Value score of A.
21Vianet Group is trading at a forward earnings multiple of -25.55 at the moment, with a PEG ratio of -0.46. This compares to its industry's average P/E of 22.74 and average PEG ratio of 1.26.
VNET's price-to-earnings ratio has been as high as -4 and as low as -25.55, with a median of -7.07, while its PEG ratio has been as high as -0.07 and as low as -0.46, with a median of -0.13, all within the past year.
Furthermore, 21Vianet Group holds a P/B ratio of 0.48 and its industry's price-to-book ratio is 5.02. VNET's P/B has been as high as 0.97, as low as 0.36, with a median of 0.69 over the past 12 months.
These are only a few of the key metrics included in Baidu and 21Vianet Group strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, BIDU and VNET look like an impressive value stock at the moment.
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Baidu, Inc. (BIDU) : Free Stock Analysis Report
Vnet Group Inc. (VNET) : Free Stock Analysis Report
