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

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 0.4%. By the end of trading, Baidu fell $1.66 (-1.7%) to $98.00 on light volume. Throughout the day, 3,049,944 shares of Baidu exchanged hands as compared to its average daily volume of 4,132,500 shares. The stock ranged in price between $97.07-$100.04 after having opened the day at $99.41 as compared to the previous trading day's close of $99.66. Other companies within the Internet industry that declined today were: ModusLink Global Solutions ( MLNK), down 4.3%, China Finance Online ( JRJC), down 4.1%, Renren ( RENN), down 3.9% and Vipshop Holdings Ltd ADR ( VIPS), down 3.4%.
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Baidu, Inc. provides Internet search services. Baidu has a market cap of $34.1 billion and is part of the technology sector. The company has a P/E ratio of 18.4, above the S&P 500 P/E ratio of 17.7. Shares are down 2.8% year to date as of the close of trading on Thursday. Currently there are 4 analysts that rate Baidu a buy, 1 analyst rates it a sell, and 8 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, growth in earnings per share, expanding profit margins, increase in net income 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, Groupon ( GRPN), down 11.5%, Friendfinder Networks ( FFN), down 6.2%, Yelp ( YELP), down 4.6% and LinkedIn ( LNKD), down 3.6% , were all gainers within the internet industry with ( SOHU) 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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