Why I Loaded Up on Baidu (BIDU, GOOG)

Why I Loaded Up on Baidu

Baidu (NASDAQ: BIDU ) trades for 21 times earnings, narrowly cheaper than Google (NASDAQ: GOOG ) , yet Baidu is growing significantly faster than Google and has promising macro tailwinds in its favor.

Given that the company commands 80% of the search market in the country, and half of China's population still doesn't have Internet access, it's easy to see how Baidu could continue to grow for years to come.

But that's not all -- the company is also make big moves in the mobile space and looking to secure a similarly dominant position in that arena. They'll be launching a low-cost smartphone which should be a compelling proposition for a country where the average annual income is still around $4,000.

But no investment is guaranteed, and before you even think about investing in this company, make sure you read this premium report today. In it, our top Baidu analyst, Andrew Tonner, separates fact from fiction and tells investors what they need to know to determine whether Baidu is a buy today. Just click here to access it now.

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Report this Comment On December 05, 2012, at 6:42 PM, mikevr1463 wrote:

Hi Austin:
Everyone at MF almost gushes in endorsing BIDU. Yet, what hard evidence is there that Bidu is an innovator, not just a Google replicator. What evidence is there that Bidu can stand on its own creative legs? Market macros can and do change rapidly. A history of innovation would be very helpful for investors by suggesting that BIDU could surmount the shift from desk tops to mobile devices.
Q1: How much of Bidu's share price changes merely reflects govt influences, i.e gains due to govt "excluding'Google", or decreases due to govt censoring /accounting? Stripping these influences, what can you point to that shows Bidu is an innovator?
In short, what has Bidu really done without govt interference? Just because there is a potential market does not mean Bidu is a good long term investment. Bidu's recent exrtreme sensitivity to Qihu suggests quite the contrary. If you could show a a clear cut history of innovation, it would be appreciated.
Cheers,
Mike (long Bidu and Sina)