| Stock (Symbol) | Stock Price | |
Baidu.com (BIDU) |
$204 |
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| Data is as of | Expected to Report | Sector |
March 2, 2015 |
Apr 22 – Apr 27 |
Technology |
| Sharek’s Take | ||
 Baidu’s management lowered profit estimates for 2015 saying it has to continue to spend to stay on top — just like all the other web companies do. This has been an issue in the past as you can read here and here. Sad, because I really liked BIDU, having it at the #1 stock in my Power Rankings a few months back. The bad news hasn’t been too damaging for BIDU stock as it closed at $215 before it reported, dropped to $205 after the news broke, and is around that price now. Still, I feel BIDU has lost some momentum as profit growth could be not-so-great for the next few qtrs. I’m moving Baidu down in my Power Rankings and have sold some shares, but each time management has done this in the past the stock has gone on later to reach new heights. Also sales growth was a solid 48% last qtr. |
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| One-Year Chart | ||
 Still a good-looking one-year chart. Love the Est LTG of 38%, wish profits would grow that fast now, but 2015 is another year of transition. Estimates don’t look great and I wouldn’t bet on BIDU beating these as it missed last qtr. Profits have been record high every year — nice. |
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| Earnings Table | ||
 Profit growth was only 13% last qtr on a 48% rise in sales. Spend, spend, spend.BIDU missed by 19 cents which was totally unexpected as it had beaten by at least 20 cents the other 3 qtrs in 2014. Annual Profit Estimates got slashed. Quarterly profit estimates can’t be counted on. I would sell some shares of BIDU and hold some as this is still a great stock long-term. |
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| Fair Value | ||
 I’m taking my Fair Value valuation of BIDU down from 40x earnings to 30x. Now the stock has a 2015 Fair Value of $215, and its selling close to that now. I don’t think BIDU has the momentum to move much higher but it could. Solid 2014 upside of 40%. |
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| Ten-Year Chart | ||
 I’ve owned BIDU since 2006, first buying in at $9 (after splits). Yes it has been a great holding, but BIDU does go on a roller coaster ride from time-to-time. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
10 of 23 |
Baidu is the largest search engine in China and that market continues to grow. Unfortunately management is going to do what it can to stay on top even if that hurts profitability. |
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Aggressive Growth Portfolio
N/A |
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