BIDU Stock Analysis

Stock of the Day
Baidu.com Inc.
Wednesday’s Intra-day Price: BIDU – $103.50

As many of you already know; I have bought, researched and screened multiple Chinese related companies over the past 4-6 months and this company is the leading provider of Chinese language online search services. Its search engine is the most frequently used search service in China. According to web site traffic ranking company Alexa.com, the company’s flagship web site was the most visited in China and the fifth most trafficked in the world during early 2007.

042507_bidu_retrace.png

Aside from BIDU, I have also done extensive analysis on this blog for EDU, MR, and PTR in 2007. EDU is now up about 30% since my original analysis in February: Learning about New Oriental Education (EDU)

Looking at the charts, I see a golden opportunity for a buy right here near the 200-d moving average with a confirmation above the 50-d moving average (which we got yesterday). The stock was posted to the blog in March as it started the current four week basing pattern near the long term moving average.

I mentioned a short term target of $118 earlier today based on Fibonacci retracement levels and the triple top breakout on the point and figure chart. A full 100% retracement and complete cup formation would take the stock back into the $130’s.

Next Earnings Date: 4/27/07
Sector: Information Technology
Industry: Internet Software & Services
52-week Range: $134.10 – $57.00

Institutional Statistics:
Held by Institutions: 62%
Money Market: 116
Mutual Fund: 135
Other: 4

Shares Held: 21.64mil
Shares Held Previous Period: 17.59mil
Shares Bought: 8.63mil
Shares Sold: 4.58 mil

Value of Shares Bought: $874mil
Value of Shares Sold: $463mil

Top Institutional Holders:
Fidelity Management & Research Corp: 1.75mil shares
Morgan Stanley: 1.45mil shares
Wellington Management Company, LLP: 1.40mil shares
Fidelity Magellan Fund Inc: 1.06mil shares
Lone Pine Capital, LLC: 0.96mil shares

Key Fundamental Numbers:
Market Cap.: 482.1M
Outstanding Shares: 4.6M
Short Ratio: 1.25
Net Income $M: 38.70
ROA (%): 6.8 (2005)
ROE (%): 9.5 (2005)
P/E (TTM): 90.60
P/E (Forward): 54.67
Price to Sales Ratio: 4.26
Book Value per Share: 27.07
PEG Ratio: 1.31
Price to Book Ratio: 3.25

Last Quarter: 0.45, 40.63% surprise
Next Quarter 0.33
Next Year 1.82

042507_bidu_pnf.png

Revenue (millions):
Yearly (2006): 107.40
Yearly (2005): 39.56
Yearly (2004): 13.40
Yearly (2003): 4.67

Earnings:
Yearly (2006): 1.10
Yearly (2005): 0.18
Yearly (2004): 0.05

Comments

  1. Steven Mac says:

    Thanks Chris on the post. I do have a question for you regarding the 100% retracement level. From your experience, if a stock can retrace back to the 100% level, is there a strong probability that the stock could go another 20% or higher beyond that point? Or do you typically begin to look to have already sold out of the stock at this point?

    Thanks,
    Steven Mac

  2. Good call Chris. Sitting at $129 AH.
    Too bad I miss this opportunity.

  3. Terry Zink says:

    I took your advice and actually bought the stock today (Thursday). Had you not brought it to my attention I wouldn’t have bought it. Thanks a bunch!

  4. Herman and Terry,
    I feel your joy. It was a big decision to buy prior to earnings but the action was excellent!

  5. Steve,
    I always tighten the stop from 15%-25% from the highest high to 15% or less (preferably 10%) after a full retracement. I want to capture the gains at this point. Try it and develop a rule that fits your style based on actual trades.

    I will tighten tomorrow on BIDU. It will be a crazy opening. A possible short-term minor fade early morning (after gap-up) for those of you who have the balls to place the position.

Trackbacks

  1. […] (in blue) below and then answer them using the numbers of actual case studies in 2007 (MA, BIDU and EDU will be my focus). Read any of these books to understand in depth what I am looking for […]

  2. […] this stock has been hit very hard over the past five days as it has lost more than $125 from its peak high. Baidu is currently sitting at the 50-d m.a. with its 200-d m.a. just above […]

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