December 10, 2012
In the video below, Motley Fool analyst Andrew Tonner discusses Chinese Internet search play Baidu (NASDAQ: BIDU ) , which has had a rough week of trading, falling by 10%. The drop comes after news that the U.S. Department of Justice is investigating auditors of 110 Chinese companies that trade on U.S. markets as ADRs. The Justice Department is looking into the quality of their accounting standards. The story has been building for some time, and it carries a big risk: Baidu's ticker could potentially be pulled from American trading.
But all that has made Baidu a cheap stock. With both revenue and earnings growing between 40% and 50% a year, and with no real competition, Baidu is trading at just 19 times earnings. Baidu has maintained market share and has already positioned itself well for the future as the industry leader in China's growing mobile market.
For investors with a tolerance for risk, Baidu at this price presents an interesting growth story for investors to consider.
Regardless of your short-term view on the Chinese economy, there may be opportunity in Baidu (aka the "Chinese Google"). Our brand-new premium report breaks down the dominant Chinese search provider's strengths and weaknesses. Just click here to access it now.