These Superstars Are Buying Baidu

The best investing advice I ever received was from Tom Gardner. I couldn't tell you when or where he said it, or what I was doing when I heard it, but I remember the words distinctly.

"Study the masters," he said.

It's an oft-repeated theme here at The Motley Fool. We think that great investors can be great teachers when they expose you to what they're buying, and why. That's why we follow Buffett so closely. It's also why we created Motley Fool CAPS, a 125,000-strong community of stock pickers where ideas flow freely.

In my experience, the best learning happens when you combine good tools. Here, in this column, we'll compare data from Morningstar and CAPS to track which top investors are buying the best stocks in CAPS -- the ones that are proven to outperform -- and why.

Today's guinea pig? Chinese search star Baidu (Nasdaq: BIDU  ) , which is also a pick of our Motley Fool Rule Breakers service. Each of these three high-rated funds has been buying shares, reports Morningstar:

Fund

Morningstar
Rating

Shares Bought

Other Recent Buys

Allianz RCM Technology
(DRGTX)

****

47,000

Activision Blizzard (Nasdaq: ATVI  )

Hartford Growth Opportunities
(FGRWX)

****

45,000

BMC Software (NYSE: BMC  )

Harbor Mid-Cap Growth
(HAMGX)

****

15,000

Varian Medical (NYSE: VAR  )

Source: Morningstar.com.

And here's a look at superstar CAPS investors who think that Baidu will outperform:

All-Star

Player Rating

Other Recent Buys

BrianRuth

99.53

XTO Energy (NYSE: XTO  )

htgao

99.03

Gold Fields (NYSE: GFI  )

dwelllewd

98.08

Goldcorp (NYSE: GG  )

Source: CAPS, as of Jan. 15, 2009.

That's not an easy call. Baidu has been marred by a scandal surrounding its paid-search practices. Critics have since piled on but the one thing they can't change -- Baidu's position as China's search leader -- is what BrianRuth likes about the company.

"I also think that Chinese search is relatively insulated from external pressure given the rapid expansion of technology infrastructure and the vast numbers of people in China who still aren't online," our Fool wrote last March. "Couple that with the rise in income and I think Baidu can still do well despite the rich valuation."

All-Star htgao went further in a December pitch. "I do not live in China, but I use it more often than Google. The fact is, it is BETTER than Google in many ways and people ALL AROUND the world use it."

The remainder of our CAPS community is mostly bullish. Of the 3,520 investors who've rated Baidu, 3,078 -- or 87.4% -- say it will beat the market. Do you agree? Let us know by logging in to CAPS now; it's 100% free to participate.

Activision Blizzard is a Stock Advisor selection. Baidu and Google are Rule Breakers recommendations. Try either of these Foolish services free for 30 days. There's no obligation to subscribe.

Fool contributor Tim Beyers had stock and options positions in Google at the time of publication. He also writes for Rule Breakers. Check out his portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. Its disclosure policy, like a thick steak, is juicy and delicious.


Read/Post Comments (3) | Recommend This Article (8)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 15, 2009, at 5:35 PM, willey12 wrote:

    You might also want to look at BYDDF. Warren Buffet has purchased a large stake in this company.

  • Report this Comment On January 15, 2009, at 6:15 PM, bignewbe wrote:

    How to buy BYDDF in US? I have a Zecco account. But I cannot buy it.

  • Report this Comment On February 20, 2009, at 2:12 AM, Luther1517 wrote:

    I had the same problem with BYDDF, you have to call them to place the order over the phone I believe. Wells Fargo has a great investment plan although you have to park a 1000 dollars in an investment account until the stock is purchased. I would buy as many shares of this company as possible. They are killing everyone in the car market. They're so much good stuff about this stock, it is undervalued normal rate is at 6 dollars. When they turned off their factories to switch to full car production their stock prices tanked. Now they have an amazing car that is better than the GM's Volt and already saleing like hotcakes in China with an even better car on the way. Just wait till they start saleing cars here. Warren Buffet's 10% stake with its awesome management.The company has a huge hand in lithium batteries which they are known for. You may have a cell phone with one of their batteries. It's a young growing company with still a market cap could probably turn 5000 dollars into 500000 dollars in probably 10 years.

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