TTD's Quality Rating of Stock - BIDU -  ABOVE AVERAGE

  BIDU, based in China, is a Chinese-language Internet search provider. Annual revenues: $599 million. BIDU's stock rises sharply today sending the leading stock to a new high. The driver: Talk that new competitor Google may exit the Chinese market. So far today, BIDU is trading 5.8 million shares, triple its normal daily volume of 2 million shares.

  BIDU's stock rose sharply on Wednesday when Google said it might leave the Chinese market because of security concerns above its search system. The system was hacked.

  BIDU's stock dipped a bit in premarket trading prior to Thursday's opening. However, the stock turned higher in the morning and trended higher most of the day. It hit a peak of 467.95.

  BIDU's recent block trades show a good flow institutional money into the stock. The block trade prices climbed from $391.81 on Tuesday to a peak of  $447.70. Of course, the price today moved sharply higher from that point.

 BIDU operates Baidu Online Network Technology Co., Ltd. (Baidu Online), its wholly owned subsidiary in Beijing, China.

 The company also conducts its operations in China through Baidu Netcom Science Technology Co., Ltd. (Baidu Netcom), which holds the licenses and approvals necessary to operate the Company’s Websites and provide online advertising services.

 In January 2008, the Company launched a Japanese search service at www.baidu.jp, run by Baidu Japan. The Company’s Japanese search services enable users to find relevant information online, including Web pages, images, multimedia files and blogs, through links provided on its Websites.

  BIDU's stock is a leader and making new all-time highs.

  BIDU's 12-month performance chart (see below) shows the stock appreciating 310% compared with a 30% gain for the S&P 500 index.

  BIDU's long-term chart shows the stock soaring from 78 in 2005 to a peak of 385 in 2007. The stock then fell sharply during the bear market. However, it has since comeback strongly.

  BIDU's daily chart shows the stock advancing from 280 to 440. The stock then put down a flat base. However, the base looked suspect. Just a few sessions ago, BIDU's stock began to roll over.

  However, all that changed due to the "Google dynamic" which put BIDU's stock back in play.

  The past two sessions the stock has rallied strongly with good volume.

  The stock's accumulation - distribution line (bottom of chart) has turned up smartly indicating good demand for the stock. The TTD momentum indicator lags. TTD sees that improving in coming sessions.

 For 2009, analysts expect BIDU's to post a 40% increase in net to $6.19 a share from $4.43 a year ago. The stock sells with a price-earnings ratio of 74. That is high. So, the stock is not for the faint of heart.

  Looking out to 2010, analysts predict a 38% improvement in net to $8.55 a share from the anticipated $6.19 a year ago.

  Those estimates could get a boost if Google exits China. That would make the search-advertising market more lucrative for BIDU.

  BIDU should post a 37% increase in net for the fourth quarter to $1.67 a share from $1.22 a year ago. The highest estimate on the Street is at $1.78 a share. TTD sees chances for an upside surprise. The past two quarters, BIDU topped the consensus estimate by 27 cents a share and 15 cents.

  Strategy Opinion: BIDU is a leader. The breakout looks good and is driven by a fundamental development. However, TTD would suggest some caution and just scale-into the stock with a partial position. TTD is targeting BIDU for a move to 520. A protective stop can be placed near 420. TTD rates BIDU a very good intermediate-term play provided earnings remain on target.

  Sponsorship: Very Good. The largest fund holder is CGM Focus Fund with a 2% stake. The 3-star rated fund has held its position steady. The second largest holder is 5-star rated Thornburg Intl. Value Fund with a 1.3% stake. It has held its stake steady. BIDU has 34.7 million shares outstanding.   

  Insider Activity: Not available. Currently, 15 analysts follow the stock, 7 have a buy, down from 8 three months ago.

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  Stock Performance Chart for 12 months with Quarterly Earnings Markers.

    

 

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