| Stock (Symbol) | Stock Price | |
Baidu.com (BIDU) |
$219 |
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| Data is as of | Expected to Report | Sector |
August 6, 2014 |
Oct 27 – Oct 31 |
Technology |
| Sharek’s Take | ||
 Baidu whipped estimates for the second straight quarter, as mobile ads accounted for 30% of total revenue — up from 10% in the year-ago-period and 20% in 2013 Q4. Now that Baidu has figured out mobile (and reduced R&D spending) profits are taking flight. But what really gets me excited is revenue is expected to climb from $30 billion last year to $50 billion this year and $70 billion next year. Profit are expected to soar too — from $6 this year to an estimated $11 in 2016. When you consider $11 in profits, the $219 stock has huge upside, which is why I’ll be adding BIDU to the Aggressive Growth Portfolio. |
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| One-Year Chart | ||
 Although I’ll be buying more shares, BIDU isn’t really on sale. The stock has a P/E of 37, which compares to its Est LTG of 37%. But, the stock broke out after it reported earnings, so momentum is high. I also feel BIDU will beat these Estimates. |
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| Earnings Table | ||
 BIDU’s sales jumped a blistering 57% last quarter. This company certainly has the revenue to pump out the profits. Profit growth was “only” 34% last qtr.The company beat the street for a second straight quarter, and I feel it will do it again. Annual Profit Estimates leapt higher this quarter. Notice the $11.08 estimate for 2016. Quarterly profit estimates just look Ok, but I think these numbers will continue to grow. |
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| Fair Value | ||
 Chinese Internet stocks are hot right now, and now that the Chinese stock market has turned up, I think the best Chinese stocks are set to soar. BIDU has a solid 50% upside to its 2015 Fair Value. |
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| Ten-Year Chart | ||
 This stock looks extended on the ten-year chart, as the P/E of 37 is high when compared to the median P/E of 25 in 2012 and 27 in 2013. But BIDU used to get high P/E’s around 2007, and with 50% revenue growth, the stock should be able to hold this high valuation. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
6 of 25 |
Baidu.com’s rapid growth looks to continue for years to come, and a 37 P/E on $11 in earnings could net the stock a $400 price within two or three years — almost double where the stock stands now. |
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Aggressive Growth Portfolio
6 of 12 |
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