Baidu Inc. (BIDU): Today's Highlighted Laggard In Technology

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Baidu ( BIDU) pushed the Technology sector lower today making it today's featured Technology laggard. The sector as a whole closed the day down 1.2%. By the end of trading, Baidu fell $2.16 (-2.5%) to $85.96 on light volume. Throughout the day, 2.9 million shares of Baidu exchanged hands as compared to its average daily volume of 4.4 million shares. The stock ranged in price between $85.80-$89 after having opened the day at $88.37 as compared to the previous trading day's close of $88.12. Other companies within the Technology sector that declined today were: Mindspeed Technologies ( MSPD), down 16.3%, eOn Communications Corporation ( EONC), down 16%, BOS Better Online Solutions ( BOSC), down 12.9%, and Dataram Corporation ( DRAM), down 12.4%.
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Baidu, Inc. provides Internet search services. The company offers a Chinese language search platform on its Website, Baidu.com; and a Japanese language search platform on its Website, Baidu.jp. Baidu has a market cap of $30.44 billion and is part of the internet industry. The company has a P/E ratio of 18.2, above the S&P 500 P/E ratio of 17.7. Shares are down 12.1% year to date as of the close of trading on Tuesday. Currently there are seven analysts that rate Baidu a buy, one analyst rates it a sell, and seven rate it a hold.

TheStreet Ratings rates Baidu as a buy. 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, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the technology sector could consider Technology Select Sector SPDR ( XLK) while those bearish on the technology sector could consider ProShares Ultra Short Technology ( REW).

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