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Baidu Stock: Not For The Faint Hearted

Mar. 05, 2020 2:55 PM ETBaidu, Inc. (BIDU) Stock5 Comments


  • Baidu, Inc. faces uncertainty in the wake of the recent coronavirus.
  • Some analysts say that Baidu, Inc.'s shares have fallen too far recently amid concerns over advertising outlook and the virus outbreak.
  • The company is focusing on its AI capabilities and providing its "LinerFold" algorithm for free to help the Chinese government advance efforts in fighting the coronavirus.
  • Baidu, Inc. has traditionally relied on advertising for its revenue, a sector that is vulnerable to economic downturns.
  • This idea was discussed in more depth with members of my private investing community, Good Stocks@Bargain Prices. Get started today »

Baidu, Inc. (NASDAQ:BIDU) is facing uncertainty as the economic impact of the coronavirus remains unclear. Share values of BIDU have fallen in recent months since the outbreak began. The company relies on advertising for much of its revenue, but the ad sector is particularly vulnerable to economic slowdowns, and Baidu has had to battle with popular start-ups such as Bytedance (BDNCE). However, it is possible that the outbreak could actually help the company as more people are staying home which could lead to greater adoption of the company's services.

To aid in the fight against COVID-19, the company is increasing efforts in the artificial intelligence and healthcare technology sectors. It currently runs an online doctor consultation platform which the company has made free to use for any online medical queries. It is also providing its "LinerFold" algorithm that gene testing agencies, epidemic control centers, and research institutions globally can utilize for free to further vaccine development research. Further observation is needed to determine if these efforts provide favorable publicity for the company and will help share prices recover in the future.

While current news stories, good or bad can sway our opinion about investing in a company, we need to determine which news topics will have a long-term and ongoing effect on the company and its share price. It's also a good idea to analyze the fundamentals of the company to see where it's been in the past and in which direction it's heading.

This article will focus on the long-term fundamentals of the company, which tend to give us a better picture of the company as a viable investment. I also analyze the value of the company versus the price and help you to determine if BIDU is currently trading at a bargain price. I provide various situations which help estimate the

If you want to find good companies at bargain prices that will provide you with long-term returns and dividends or monthly swing trade profits, then my Seeking Alpha Marketplace service (Good Stocks@Bargain Prices) is a good match for you. I combine the proven methods of Warren Buffett's and Benjamin Graham's value investing with a practical system to apply these methods into today's market.

This article was written by

Grant Gigliotti profile picture

Grant Gigliotti is the founder of Beat The Market Analyzer, a leading value investing stock software and has been an active investor for 20+ years. He focuses on the value investing strategies of Warren Buffett to find good companies at bargain prices. He aims to show you how he buys good companies with strong fundamentals at large discounts from their intrinsic value.

Grant is the leader of the investing group Good Stocks@Bargain Prices where he offers subscribers: daily stock analysis, alerts for what he’s buying/selling, a regular newsletter, weekly summaries, a watch list, and chat to answer questions. Learn more.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (5)

BM Cashflow Detective profile picture
It is interesting to see in the balance sheet that cash is as high as the net worth equity and grows rapidly in the same way. For this horror volatility, paying a dividend to reduce pain would really be very appropriate. Also, how far can you trust a Chinese company's financials? I like your overall conservative rating about Baidu and I would have come to the same conclusion. My only currently Chinese stock that I own is Anta Sports and they pay a dividend. For me, the dividend is an indication of hopefully good corporate governance. Let's see how its going on in the future. Regards.
Kagami427 profile picture
*spits on the ground*
buying opportunity for sure
I Hope so too 😁 while Wating for a price increase i am Selling weekly puts
It's time to buy❗BIDU & CO❗☯️🤡✌️
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