| Stock (Symbol) | Stock Price | |
Baidu.com (BIDU) |
$150 |
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| Data is as of | Expected to Report | Sector |
November 13, 2013 |
Jan 31 – Feb 2 |
Technology |
| Sharek’s Take | ||
 I’ve owned shares of Baidu almost from the very beginning, getting in during 2006 at $9 a share. Through the years I had always giving the stock a robust fair value of around 45 to 60 times earnings. But that changed last year as mobile spending was needed to spur growth and this looked to slow profit growth (it has). Earlier this year I took my Fair Value P/E on the stock from 40 to 20. Now I’m moving it back up to 30 as the market has shrugged off the poor profit growth and focused on the future. |
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| One-Year Chart | ||
 This stock has stormed higher this year even though profit growth has been weak. Still, even after the rise the stock has a P/E of only 23. I think 20% growth is headed its way in late 2014, thus the stock is undervalued. |
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| Earnings Table | ||
 BIDU’s sales jumped 42%for the second consecutive quarter. Profits increased only 4% due to higher advertising spending and administrative costs.BIDU beat the street by a penny. Annual Profit Estimates have turned the corner and are now pointing higher. Quarterly estimates show profit growth should accelerate in the first quarter of 2014. |
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| Fair Value | ||
 BIDU has 33% upside for 2014 — and 78% upside for 2015. Once profit growth accelerates this will be a top-ten stock (I think). |
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| Ten-Year Chart | ||
 BIDU has had a great year considering profit growth is only supposed to be 6% this year. But there’s a chance the company can make $10 in 2015, and at $150 that’s a good price to pay for $10 in profits. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
9 of 25 |
Baidu gets a big bump in its Fair Value P/E this quarter — from 20 to 30. Now the stock has good upside potential for 2014 & 2015. |
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Aggressive Growth Portfolio
N/A |
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