BIDU is trading at about $209 on 2/18/2015 which is the day this pick is being made.
Baidu is China’s search engine. Much like Google, it has a dominating position and for a country that has years of increasing Internet use ahead of it, that means Baidu is in an enviable position. Its main computers are QIHU and SOHU but Google is not a player in China.
Baidu’s latest earnings report caused investors to sell the stock and briefly brought the price under $200 per share. It has recovered slightly since then but still remains considerably below its 52 week high of $252. Adding to the selling atmosphere I believe is the ongoing Alibaba “scandal” that has investigators in China looking into allegations that there is significant fraud on their websites. While not connected to Alibaba in any way, the two are both Chinese Internet companies and you have some guilt by association going on. This means BIDU’s stock price has been hit harder than it should be.
One of the main “problems” with the recent earnings report was their as yet inability to adequetely monetize mobile traffic. It seems the Chinese people are accessing the Internet via mobile devices more that projected and Baidu has been slow to adjust. This is similar to the problem Facebook and they have been able to turn things around in an astonishing way. There is no guarantee that Baidu can do the same but buying the stock here gives you a reasonable entry point in the bet that they can make substantive changes to monetize their increasing mobile traffic.
Buying BIDU is a long term play on a company that should have no trouble growing for years to come. China has more than 1.3 billion people and as more and more of them are pulled out of poverty, the number of Chinese who have access to the Internet will grow. As I see it, Baidu is China’s “Google” but the company gives you much more opportunity for long term steady growth.