Aug. 21, 2014, 11:43 AM
- Hedge funds are having a difficult time of it again this year, up 1% vs. a 7.5% gain for the S&P 500, according to Goldman Sachs, which crunched the numbers on 775 funds with $1.9T in AUM.
- Nevertheless, Goldman's list of 50 stocks which "matter most" to hedge funds has outperformed the S&P 500 on a quarterly basis 66% of the time since 2001. The stocks this quarter (posted in order of the number of funds in which a name is a top-10 holding):
- ACT, AAPL, FB, AGN, AAL, GM, TWC, AIG, MSFT, HTZ, CHTR, MU, WMB, LNG, C, DAL, HCA, APC, CBS, ALLY, GOOGL, APD, NRF, BAC, EBAY, LBTYK, PCLN, VRX, BIDU, DTV, DISH, DG, EQIX, MA, WAG, ARCP, GILD, LINTA, MON, FOXA, VC, AMZN, BRK.A, BRK.B, SUNE, CMCSA, JPM, MIC, CCI, HES, LAMR.
- A special call-out to Northstar Realty (NYSE:NRF), Visteon (NYSE:VC), SunEdison (NYSE:SUNE), Macquarie Infrastructure (NYSE:MIC), and Lamar Advertising (NASDAQ:LAMR) for making the list of hedge fund hotels despite their relatively tiny market caps.
Jul. 25, 2014, 5:32 PM
- Goldman has raised its 2014-2016 Baidu (BIDU +10.9%) EPS estimates by 17%-23% following its sizable Q2 EPS beat and above-consensus Q3 guidance, and hiked its target by $35 to $260. BofA/Merrill, Deutsche, and Piper have also raised their Baidu PTs.
- Goldman was pleased with several datapoints provided in the Q2 report and CC (transcript). Among them: 1) Baidu topped 500M mobile search monthly active users (MAUs) in June. 2) Maps MAUs have passed 200M. 3) Baidu's app distribution platforms (led by 91 Wireless) averaged 130M downloads/day in Q2. 4) The Nuomi daily deals unit (acquired from Renren) has seen its user base double since Q4.
- BofA/Merrill observes Baidu's aggressive spending growth is now being fueled more by hiring than by marketing spend, something it expects will translate into future leverage. Marketing spend fell to 11.5% of revenue from 14.1% in Q1, while R&D grew to 14.6% from 13.6%.
- Baidu made fresh highs today, and provided a lift to rivals Qihoo (QIHU +3.7%) and Sohu (SOHU +2.2%) along the way.
Jul. 25, 2014, 9:13 AM
Jul. 24, 2014, 4:57 PM
- Baidu (NASDAQ:BIDU) expects Q3 revenue of RMB13.42B-RMB13.78B ($2.16B-$2.22B), above an RMB13.28B consensus.
- Q2 Y/Y revenue growth of 58.5% was nearly even with Q1's 59.1%, and remained well above Q4's 50.4%. Active online ad customers rose 4.3% Q/Q and 9.4% Y/Y to 488K. More impressively, revenue/customer rose 15.8% Q/Q and 50.3% Y/Y to $3,901.
- SG&A spend +99.3% to $346.4M (heavy mobile promotional activity), R&D spend +84.5% to $280M. The former's growth rate slowed from Q1's 136.9% (contributed to the EPS beat), while the latter's picked up from Q1's 57.5%.
- Traffic acquisition costs rose to 12.7% of revenue from 12.4% in Q1 and 11.6% a year ago. Bandwidth costs fell to 5.8% of revenue from 6% a year ago, and content costs (online video-driven) rose to 3% from 2%.
- Mobile accounted for over 30% of revenue for the first time.
- Q2 results, PR
Jul. 24, 2014, 4:32 PM
Jul. 23, 2014, 5:35 PM
- ABAX, ACTG, ALGN, ALTR, AMZN, ATRC, AWAY, BAS, BCOV, BCR, BIDU, BJRI, BLDR, CB, CBI, CERN, CLS, COLM, CTCT, CYN, DECK, DGII, DLB, DTLK, ECHO, ELY, EPR, FET, FICO, FII, FLEX, FSL, GIMO, HBHC, IM, INFA, KLAC, LEG, LOGM, LSCC, MITK, MKTO, MLNX, MSCC, MTD, MTSN, MXIM, N, NR, NTGR, OLN, P, PACB, PEB, PFG, PFPT, QLGC, QLIK, RFMD, RGA, RGC, RSG, RVBD, SBAC, SBUX, SIVB, SPNC, SRCL, SWFT, SWI, SYA, TPX, TSRO, UHS, V, VR, VRSN, WOOF, WRE, WRI
Jul. 21, 2014, 9:49 AM
- Ahead of Thursday's Q2 report, Morgan Stanley has upgraded Baidu (BIDU +1.8%) to Overweight, and set a $239.20 target.
- MS thinks Baidu (currently expected by the Street to see 52% 2014 sales growth) can post 30%-40% annual sales growth over the next 3 years, and thinks op. margin (pressured lately by heavy spending) will bottom out towards year's end: It's expected to rise to 28% in 2016 from 24% in 2014.
- The firm also notes Baidu's top-line growth has accelerated since 2H13, thanks to improving mobile monetization. On July 3, Deutsche predicted Baidu would post strong Q2 results with the help of rapid mobile search growth and a narrowing gap between mobile and PC search ad prices.
- Shares are once more making new highs. They now go for 36x 2014E EPS, and 26x 2015E EPS.
Jul. 18, 2014, 6:10 PM
- Baidu (BIDU +2.3%) has officially launched a Brazilian search engine, replete with a Portuguese-language UI and integrated Web/image/video search.
- The Chinese search giant also says it's setting up a Brazilian R&D center, and is in talks to partner with local universities. A spokesman adds Baidu will probably launch Thai and Egyptian search engines next month.
- Baidu has made plenty of attempts over the years to grow its clout in foreign markets, where it's generally an underdog relative to Google and/or local Web firms. But success has been quite limited.
- Q2 results arrive on July 24.
Jul. 3, 2014, 1:14 PM
- Surging mobile search activity and a narrowing cost-per-click (ad price) gap relative to PC search will allow Baidu (BIDU +0.5%) to post Q2 revenue of RMB12B ($1.93B, +59.3% Y/Y), predicts Deutsche. The consensus is at RMB11.95B.
- Deutsche doesn't think new mobile search competition has done much damage to Baidu. Alibaba recently took full ownership of top Chinese mobile browser vendor UCWeb, which claims a 20%+ share of the local mobile search market. Qihoo, which has been grabbing PC search share from Baidu, launched a mobile search app in June.
- Baidu declared on its Q1 CC (transcript) it had 160M mobile search DAUs during the quarter (up from 130M two quarters earlier), and that it expects mobile to "surpass PC as the biggest source of search traffic later this year." Analysys estimates Baidu has a combined 73% PC/mobile search page view share.
- Though positive on Baidu's top-line performance, Deutsche is more cautious about its op. margin, and thinks it could see a Q/Q decline bigger than the 60 bps it currently forecasts. Soaring opex - SG&A spend rose 136.9% Y/Y in Q1, and R&D spend 57.5% - has been pressuring Baidu's bottom line.
Jun. 11, 2014, 2:39 PM
- Acquisition-hungry Alibaba (ABABA) is buying the 1/3 of top Chinese mobile browser vendor UCWeb it doesn't yet own for a mixture of cash and stock. The price hasn't been disclosed, but Alibaba claims the deal is the biggest Chinese Web merger in history, exceeding Baidu's (BIDU +0.4%) $1.9B purchase of app store provider 91 Wireless.
- UCWeb has a 50%+ share of the Chinese mobile browser market, and also has 35% of the Indian market. The company claims 500M total browser users, as well as 50M users for its Android app store, which competes against Baidu and Qihoo's (QIHU +3.8%) popular stores.
- More importantly for Baidu (and also relevant for Qihoo), UCWeb claims a 20%+ share of the Chinese mobile search market on the back of 100M active users. A mobile search JV was launched with Alibaba in April.
- Meanwhile, CNBC reports Alibaba will likely file a new F-1 early next week that includes its Q1 results. Odds are Yahoo (YHOO +0.6%), which has been reporting Alibaba's results a quarter in arrears, will move on the numbers.
- CNBC adds Alibaba is still expected to go public in the first week of August. Bloomberg previously reported Alibaba is eying an Aug. 8 IPO.
Jun. 5, 2014, 10:39 AM
- Baidu (BIDU +1.3%) is offering $1B in 2019 notes priced at 2.75%. The company expects net proceeds of $988.4M.
- Baidu previously announced plans to launch a debt offering on Tuesday, without disclosing terms. With the company already having $6.38B in cash/investments in the bank, fresh M&A activity could be in the cards.
Jun. 3, 2014, 4:59 PM
- Baidu (BIDU) hasn't yet disclosed the offering's size. In a prospectus, the Chinese search giant only says the proceeds will be used for "general corporate purposes."
- Baidu had $6.38B in cash/short-term investments at the end of Q1, $2.48B in notes payable, and $403M in long-term loans. Like Alibaba and Tencent, the company has been on a torrid investment/M&A pace.
May. 23, 2014, 1:00 PM
- Though Youku (YOKU -6.2%) beat Q1 EPS estimates, revenue of $112.7M missed a $114.2M consensus. Moreover, the company is guiding for Q2 revenue of RMB940M-RMB1B ($150.6M-$160.3M), below a $163.5M consensus.
- Maxim Group (PT cut to $16) blames the growth slowdown on Youku's attempts to lower purchases of long-form content preferred by advertisers.
- It believes a "weak content portfolio" led Youku to lose its Chinese online/mobile video leadership positions in Q1 to Baidu's (BIDU +1.7%) iQiyi and PPS platforms. Baidu has been busy promoting iQiyi/PPS throughout its Web empire.
- "Top-line growth seems to be on a deceleration trend," writes Deutsche (PT cut to $21) in response to Youku's numbers. The firm and thinks the Q2 guidance points to weaker advertiser budget hikes.
- Cost controls helped EPS beat estimates: Youku's content spend fell to 44% of revenue in Q1 from 49% a year ago. Bandwidth costs fell to 29% of revenue from 31%, and opex only grew 9% Y/Y (compares with 36% rev. growth).
- On the CC (transcript), Youku mentioned mobile daily video views have topped 400M (they were only at 200M last June), and that mobile now accounts for 1/3 of revenue.
- Q1 results, PR
May. 16, 2014, 6:03 PM
- Baidu (BIDU) has hired Andrew Ng, a researcher who formerly headed a Google effort (known as Google Brain) to digitally recreate the human brain (with the goal of solving hard A.I. problems), to head its own A.I. efforts.
- Baidu, never shy to take a page from Google, plans to spend ~$300M over the next 5 years on developing A.I. solutions based on deep learning. The technology's applications include natural-language, voice, and image recognition - all three are relevant to search.
- Ng will oversee both a Baidu Silicon Valley lab, and a Beijing R&D center. As it is, Baidu's R&D spend rose 57.5% Y/Y in Q1.
May. 13, 2014, 4:52 AM
- The European Union Court of Justice (ECJ) has ruled that Google (GOOG) can be ordered to delete sensitive information, under certain conditions, from its Internet search results if it is requested to do so.
- Google had argued that forcing it to remove data amounted to censorship, although privacy advocates believe that people should be able to delete their digital traces.
- The issue arose after a Spanish man complained that his privacy was infringed when an auction notice of his repossessed home appeared on search results.
- Other relevant tickers: YHOO, MSFT, YNDX, BIDU
Apr. 28, 2014, 10:17 AM
- Sohu (SOHU -4.8%) missed Q1 estimates and provided light Q2 guidance. Meanwhile, as part of a recent crackdown, the Chinese government has pulled The Big Bang Theory and other popular U.S. shows from sites such as Sohu.com, Youku.com (YOKU -4.4%), Baidu's (BIDU -5%) iQiyi, and Tencent Video (TCEHY -2.8%). Time observes The Big Bang Theory has produced 1.3B video views since launching on Sohu TV in '09.
- The news is overshadowing a $1.22B investment in Youku by Alibaba (ABABA) and an affiliated P-E firm, and a WSJ report stating Alibaba is forming a mobile search JV with leading mobile browser firm UCWeb (once targeted by Baidu).
- The deals are the latest in a long line of investments and partnerships struck by Alibaba, Tencent, and Baidu, as each firm tries to build a Web/mobile empire covering over a dozen valuable markets.
- Is Qihoo (QIHU -0.8%) next in line to make a deal? With a $21.6B market cap, the security app/browser/search provider and Baidu rival is the biggest Chinese Internet company to remain independent of the big-3. Qihoo was reported in January to be talking with Alibaba.
- Other decliners: NQ -6.5%. VIPS -5.2%. WB -4.2%. WBAI -3%. LONG -4.5%. QUNR -2.4%.
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