Today's Internet Industry Featured Laggard: Baidu Inc. (BIDU)

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 Internet industry lower today making it today's featured Internet laggard. The industry as a whole closed the day down 1.3%. By the end of trading, Baidu fell $1.68 (-1.9%) to $88.61 on average volume. Throughout the day, 3.2 million shares of Baidu exchanged hands as compared to its average daily volume of 4.2 million shares. The stock ranged in price between $88.38-$90.55 after having opened the day at $89.25 as compared to the previous trading day's close of $90.29. Other companies within the Internet industry that declined today were: Geeknet ( GKNT), down 5.9%, VirnetX ( VHC), down 5.2%, Synacor ( SYNC), down 5%, and Limelight Networks ( LLNW), down 4.6%.
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Baidu, Inc. provides Internet search services. Baidu has a market cap of $30.97 billion and is part of the technology sector. The company has a P/E ratio of 18.5, above the S&P 500 P/E ratio of 17.7. Shares are down 11.7% year to date as of the close of trading on Tuesday. Currently there are six 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.

On the positive front, Friendfinder Networks ( FFN), up 3.8%, Internet Initiative Japan ( IIJI), up 2.7%, Remark Media ( MARK), up 2.1%, and ChinaCache International Holdings ( CCIH), up 1.6%, were all gainers within the internet industry with Qihoo 360 Technology ( QIHU) being today's featured internet industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the internet industry could consider First Trust Dow Jones Internet Idx ( FDN) while those bearish on the internet industry could consider ProShares Ultra Short Technology ( REW).

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