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Whitney Chia
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Been trading in these markets for 8 years, first as a day trader and now I take on more short term bets, anywhere from 1 month to 6-12 months. Have started taking my trading a bit more seriously in the past 4 years trying to analyze situations a bit more fundamentally. Would love to keep... More
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  • Changing Things Up A Bit

    Sold my BIDU shares, fortunate bounce back from earnings, despite what was a pretty terrible revenue number. I sold around 91.90 which I think is an ok long exit, I would not short this stock.

    I also covered my 7000 share CRM short, this is a really tough stock to short despite it being quite overvalued. I still believe in shorting the cloud space, but CRM is the strongest name out there. I've rotated into a smaller cloud stock with an even loftier valuation. Shorted myself 5000 shares of WDAY.

    Generally speaking, I am biased towards the short side, I don't really see people chasing the market up here.

    Disclosure: I am short WDAY.

    Additional disclosure: short 5000 shares of WDAY

    May 08 11:50 AM | Link | Comment!
  • Update On Positions

    Just a quick update, with the 4 for 1 split, I am now short 7000 shares of CRM. I think there is room for it to go down a bit more, but have had my face ripped off shorting this before. Definitely a risky trade. Still believe in the BIDU long but will obviously reassess if it goes below 80 and makes that lower low.

    Disclosure: I am long BIDU.

    Additional disclosure: Long 700 shares of BIDU and short 7000 shares of CRM.

    Apr 19 12:50 AM | Link | Comment!
  • Is BIDU Worth A Shot Here?

    It is quite an interesting time to currently be long BIDU, as I am, the stock has just rebounded off of its 52 week low starting this past week off a little under 84, and closing Friday a little under 91. Right around the 90 area is where a decision needs to be made to either exit or view that this stock will make a run above 100 and stay there. We've had a little bounce, but what should we make of it? The stock recently made a move down to the 80s in December 2012 only to bounce back into the 110 area.

    Now, let's look at exactly what you are buying. The easiest comparison in the U.S. would probably be YHOO, BIDU isn't as innovative as GOOG and isn't involved in as many businesses as GOOG is. BIDU is different from YHOO in some ways, since it is still a growing company and YHOO is not. But assuming GOOG will remain the leader in this industry, it would be appropriate to expect BIDU to grow into a YHOO type valuation when it is mature.

    Let's take a quick snapshot before factoring in growth

    MetricYHOOBIDU
    Share Outstanding1,101,295,000349,660,000
    Market Cap close of 4/12/201327,190,973,55031,686,189,200
    Revenue 20124,986,560,0003,580,364,000
    EPS 20123.284.79
    Price close of 4/12/201324.6990.62
    P/E7.52743902418.91858038
    MCAP/Rev5.4528519768.849991007

    Judging by this, Yahoo is clearly cheaper and a more efficient valuation. However, this would be quite a short sighted view, since BIDU is still growing and YHOO has stopped and has predictable revenues now. So let's factor in some growth and see where that takes us. Since BIDU is a growth stock, let's take a look at the more important metric of revenue, thats where most analysts will be looking.

    YearBIDU revenuesAbsolute ValueGrowth Rate
    20123,580,364,0001,276,421,00055.40159%
    20112,303,943,0001,104,689,00092.11468%
    20101,199,254,000547,651,00084.04673%
    2009651,603,000  

    It appears the rate of growth from a percentage standpoint is slowing, however, the absolute value of the growth still appears to be increasing and healthy.

    BIDU has been able to grow their revenues a little over 1 billion dollars for the past two years. Let's assume they continue to grow their revenues 1.1 to 1.2 billion dollars every year, how long will it take for this $90.62 stock to have the same MCAP/Rev as YHOO currently does.

    It would take a target revenue of about 5.8 billion to get to this ratio which would take them around 2 years given the 1.1 to 1.2 billion dollars of growth in revenues. Now, what does this mean for us, does it mean its cheap, does it mean its expensive? Well, it means nothing and everything at once, it gives us an idea of the numbers we need BIDU to hit to justify this sort of valuation. Keep in mind this is saying that BIDU will grow at this rate for 2 years and then completely stop growing, which is not likely.

    I personally am a believer that not only will it be able to hit these revenue numbers over the next 2 years, but that it won't stop growing after that. We're in the middle of a mobile and technological revolution and BIDU is positioned to take advantage of that. Now if the revenue numbers come in even better than this rate, get long and make some money!

    Disclosure: I am long BIDU.

    Additional disclosure: I am currently long 700 BIDU at 84 and short 1750 CRM at 176.

    Tags: BIDU
    Apr 14 9:03 PM | Link | 1 Comment
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