Baidu has underperformed the market by about 30% over the past year, Jeremy says. That's significant for a company that is so well positioned it essentially operates as a monopoly.
Scares over fraudulent Chinese companies have dragged down Baidu's price. Worries over a slowing Chinese economy also have delivered a blow, Jeremy says. But he sees this as a buying opportunity for the stock.
Because it operates in China, Baidu is one of the few Google-proof Internet companies in the world, Jeremy says. Baidu has been able to not only outpace Google's growth, but it has nearly doubled it, averaging about 70% growth, Austin notes. And that's in a nation where only about half of the people have Internet access.
With that growth, and a price that has Baidu trading at the same multiple as Google, the two analysts see the stock as a buy.
Austin Smith, Jeremy Phillips, and The Motley Fool own shares of Google and Baidu. The Motley Fool also recommends Baidu and Google. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.