Sold about 25% of our Baidu (BIDU) position in the Growth and Hedged Growth portfolios this afternoon around $438. BIDU has been a huge winner in those portfolios including a 243% gainer in the Growth portfolio.
BIDU appears to be trying to set up a double top so its at risk of peaking. This is similar to a lot of other stocks as well, but we also feel that BIDU is closer to the proper valuation then most stocks. Trading at over 40x next years earnings leaves BIDU with very little multiple expansion unlike most stocks in the market. Granted, BIDU could still just grow at its growth rate of over 40% and we'd be happy investors. For now, we've just cut back on 25% of our holdings in both portfolios.
After selling, BIDU broke to a new 52 week high, but then quickly traded back down with the market. Seems to be a lot of resistance so we'll stick with locking in some gains for now.