Baidu (BIDU) Showing Signs Of Being A Roof Leaker
Trade-Ideas LLC identified Baidu ( BIDU) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Baidu as such a stock due to the following factors:
- BIDU has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $594.6 million.
- BIDU has traded 1.2 million shares today.
- BIDU is trading at 6.14 times the normal volume for the stock at this time of day.
- BIDU crossed below its 200-day simple moving average.
'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend.
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More details on BIDU: Baidu, Inc. provides Internet search services in China and internationally. It operates through Search Services, Transaction Services, and IQiyi segments. BIDU has a PE ratio of 13. Currently there are 6 analysts that rate Baidu a buy, no analysts rate it a sell, and 1 rates it a hold. The average volume for Baidu has been 2.9 million shares per day over the past 30 days. Baidu has a market cap of $67.2 billion and is part of the technology sector and internet industry. Shares are down 5.4% year-to-date as of the close of trading on Monday.
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Analysis:
rates Baidu as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, notable return on equity and expanding profit margins. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself. Highlights from the ratings report include:
- BIDU's revenue growth has slightly outpaced the industry average of 20.6%. Since the same quarter one year prior, revenues rose by 24.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- BAIDU INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, BAIDU INC increased its bottom line by earning $14.69 versus $6.01 in the prior year. This year, the market expects an improvement in earnings ($40.33 versus $14.69).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet Software & Services industry. The net income increased by 653.1% when compared to the same quarter one year prior, rising from $503.02 million to $3,788.27 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Internet Software & Services industry and the overall market, BAIDU INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The gross profit margin for BAIDU INC is rather high; currently it is at 60.02%. Regardless of BIDU's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BIDU's net profit margin of 138.00% significantly outperformed against the industry.
- You can view the full Baidu Ratings Report.
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