| Stock (Symbol) | Stock Price | |||||||||||||||||||||||||||||||
Baidu.com (BIDU) |
$128 |
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| Data is as of | Expected to Report | Sector | ||||||||||||||||||||||||||||||
February 18, 2011 |
Apr 25 |
Technology |
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| Sharek’s Take | ||||||||||||||||||||||||||||||||
 Baidu.com (BIDU) is the king of small business advertising in China. Of the company’s 276,000 subscribers only about 1000 are large businesses — leaving HUGE growth opportunity. Last quarter revenue jumped 101% by a combination as customers increased 24% and revenue per jumped 56% (to $1348). BIDU’s customers grew around 25% last quarter but each of these customers spent more than 50% more than last year. Small businesses are loving Baidu.com.
The most important fact to remember about BIDU stock is something I read in 2010: “Sales of text-based search ads in China are expected to jump from about $1billion now to $4billion by 2012” source: Investors.comSo revenues are poised to grow four-fold in two years. This is the time to own BIDU. |
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| One-Year Chart | ||||||||||||||||||||||||||||||||
 BIDU’s been on quite a run the last year. That breakout at $50 a year ago looks so sweet now. Profit growth and estimated profit growth is exceptional. The estimates Long Term Growth Rate |
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| Earnings Table | ||||||||||||||||||||||||||||||||
 Profits jumped 178% — the highest rate since 2007 — and revenues rose 101%. Revenue growth is accelerating — BIDU’s business is speeding up!
BIDU beat by 5 cents last quarter and now has a nice trend of upping and beating. Annual Profit Estimates rose this quarter, in the prior quarter they plowed higher — this is probably the only thing that’s not super about the earnings table. Quarterly estimates show solid if not spectacular growth ahead for at least the next four quarters — and these numbers are trending higher. |
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| Fair Value | ||||||||||||||||||||||||||||||||
 BIDU is $128 now and current fair value is $161. With the one-year chart showing the stock extended after a big run higher, and fair value only 25% higher than today’s price, BIDU could use a correction.
Last quarter BIDU’s 2012 Fair Value was double its stock price at the time. Now with the stock a little higher, upside to 2012 fair value is 82%. |
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| Ten-Year Chart | ||||||||||||||||||||||||||||||||
 I first purchased BIDU at $9 on 5/11/06. BIDU fell from $40 to $10 in the bear market of 2008, and I sold when BIDU jumped to $18 in early 2009 (it just rose 80%). By the time I got back in it was $43 (10/8/2009).
BIDU is extended on the ten-year chart too — but there’s a soft landing around $100 that should stop the stock from falling into the double digits. |
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| Power Ranking | Bottom Line | |||||||||||||||||||||||||||||||
Growth Portfolio
2 of 22 |
BIDU’s doing an awesome job helping small businesses and when large corporations get into the game this company is going to have an influx of revenue. It will be BIDU on steroids. The numbers look exceptional with rapid growth turning into spectacular growth. The only negative is I feel this stock needs a correction — and it could get it with the stock market over bought right now.
BIDU is the 2nd best stock in the 22 stock Growth Portfolio Power Rankings and the 10 stock Aggressive Growth Portfolio. |
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Aggressive Growth Portfolio
2 of 10 |
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