Baidu (BIDU) Highlighted As Momo Momentum Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Baidu ( BIDU) as a momo momentum 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 $523.5 million.
  • BIDU has a PE ratio of 29.8.
  • BIDU is currently in the upper 30% of its 1-year range.
  • BIDU is in the upper 25% of its 20-day range.
  • BIDU is in the upper 35% of its 5-day range.
  • BIDU is currently trading above yesterday's high.
  • BIDU has experienced a gap between today's open and yesterday's close of 0.6%.

'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.

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More details on BIDU:

Baidu, Inc. provides Chinese language Internet search services. It also offers a Chinese language search platform for businesses to reach their customers. BIDU has a PE ratio of 29.8. Currently there are 10 analysts that rate Baidu a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Baidu has been 3.8 million shares per day over the past 30 days. Baidu has a market cap of $55.3 billion and is part of the technology sector and internet industry. Shares are up 57.6% year to date as of the close of trading on Monday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Baidu as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, increase in net income, largely solid financial position with reasonable debt levels by most measures and growth in earnings per share. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • Since the same quarter one year prior, revenues rose by 44.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Compared to where it was trading one year ago, BIDU is up 69.88% to its most recent closing price of 158.40. Looking ahead, although the push and pull of a bull or bear market could certainly alter the outcome, our view is that this stock's positive fundamentals give it good potential for further appreciation.
  • The net income increased by 2.8% when compared to the same quarter one year prior, going from $486.52 million to $500.21 million.
  • The current debt-to-equity ratio, 0.51, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 5.37, which clearly demonstrates the ability to cover short-term cash needs.
  • BAIDU INC's earnings per share improvement from the most recent quarter was slightly positive. 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 $4.78 versus $3.02 in the prior year. This year, the market expects an improvement in earnings ($30.40 versus $4.78).

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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