I have been puzzled for a while about why Yahoo shows the 1 year price projection for BIDU to be so high. Currently it shows as $1571.31. Considering the current price of BIDU is $220.49, that's a pretty significant upside potential!
I finally got a few minutes to try and sort out what is going on. As is usually the case when there's a question about stock data, the best answer can be found by going to the official earnings reports on the company website.
On the BIDU site, I found that for the most recent quarter, BIDU earned $10.09 RMB (Renminbi, the official currency of China) per share which, at the time of the report was equal to $1.63 US Dollars per share. A conversion factor of about 6.56 RMB/US$
If you divide the Yahoo 1 year projection of $1571.31 by this conversion factor, you get a projected 1 year price of $239.53 which is more in line with the current US dollar price of BIDU. If you want to get a quick and dirty idea of what kind of upside potential there might be in BIDU, that, or a comparison at the current exchange rate of 6.15 RMB/$ would be the comparison to make.
Perhaps Yahoo shows the projected price in RMB because otherwise it would have to change daily along with the exchange rate. I'm not sure.
But it is something to be aware of if you are invested in this or any other foreign stock.
Laurie Frederiksen Invest with your friends! www.bivio.com
Whoops, slight correction to what I just sent out. The conversion for RMB to $ at the time of the BIDU recent quarterly report was 6.19 rather than 6.56.
That would make the Yahoo 1 year target in US $254.84.
Sorry about that.
Laurie Frederiksen Invest with your friends! www.bivio.com
On Mon, Sep 29, 2014 at 3:37 PM, Laurie Frederiksen <laurie@bivio.biz> wrote:
I have been puzzled for a while about why Yahoo shows the 1 year price projection for BIDU to be so high. Currently it shows as $1571.31. Considering the current price of BIDU is $220.49, that's a pretty significant upside potential!
I finally got a few minutes to try and sort out what is going on. As is usually the case when there's a question about stock data, the best answer can be found by going to the official earnings reports on the company website.
On the BIDU site, I found that for the most recent quarter, BIDU earned $10.09 RMB (Renminbi, the official currency of China) per share which, at the time of the report was equal to $1.63 US Dollars per share. A conversion factor of about 6.56 RMB/US$
If you divide the Yahoo 1 year projection of $1571.31 by this conversion factor, you get a projected 1 year price of $239.53 which is more in line with the current US dollar price of BIDU. If you want to get a quick and dirty idea of what kind of upside potential there might be in BIDU, that, or a comparison at the current exchange rate of 6.15 RMB/$ would be the comparison to make.
Perhaps Yahoo shows the projected price in RMB because otherwise it would have to change daily along with the exchange rate. I'm not sure.
But it is something to be aware of if you are invested in this or any other foreign stock.
Laurie Frederiksen Invest with your friends! www.bivio.com
Laurie, Thank you for the information. Good to know.
I had just assumed it was one more indication that you can't trust reports from these companies. (Which may still be true.)
Roy Chastain
"We make a living by what we get, we make a life by what we give." (Ronald Reagan, 8/8/1992)
From: Laurie Frederiksen <laurie@bivio.biz> To: The Club Cafe <club_cafe@bivio.com> Sent: Monday, September 29, 2014 12:37 PM Subject: [club_cafe] BAIDU (BIDU) 1 Year Price Projection
I have been puzzled for a while about why Yahoo shows the 1 year price projection for BIDU to be so high. Currently it shows as $1571.31. Considering the current price of BIDU is $220.49, that's a pretty significant upside potential!
I finally got a few minutes to try and sort out what is going on. As is usually the case when there's a question about stock data, the best answer can be found by going to the official earnings reports on the company website.
On the BIDU site, I found that for the most recent quarter, BIDU earned $10.09 RMB (Renminbi, the official currency of China) per share which, at the
time of the report was equal to $1.63 US Dollars per share. A conversion factor of about 6.56 RMB/US$
If you divide the Yahoo 1 year projection of $1571.31 by this conversion factor, you get a projected 1 year price of $239.53 which is more in line with the current US dollar price of BIDU. If you want to get a quick and dirty idea of what kind of upside potential there might be in BIDU, that, or a comparison at the current exchange rate of 6.15 RMB/$ would be the comparison to make.
Perhaps Yahoo shows the projected price in RMB because otherwise it would have to change daily along with the exchange rate. I'm not sure.
But it is something to be aware of if you are invested in this or any other foreign stock.
Laurie Frederiksen Invest with your friends! www.bivio.com
I think it is more an indication that if you are making projections from data, you need to make sure you understand what it represents. The growth in price of a foreign stock will have a currency exchange factor estimate affecting any long term price estimates along with just a projected growth in sales or earnings.
<g>
The more I think about it, the more I can understand why Yahoo might show a 1 year projection in foreign currency if that is what the company reports in. But I am surprised that there is not at least a footnote on the report page to indicate that the number being displayed cannot be compared directly to the current price which is shown in US dollars.
Laurie Frederiksen Invest with your friends! www.bivio.com
Laurie, Thank you for the information. Good to know.
I had just assumed it was one more indication that you can't trust reports from these companies. (Which may still be true.)
Roy Chastain
"We make a living by what we get, we make a life by what we give." (Ronald Reagan, 8/8/1992)
From: Laurie Frederiksen <laurie@bivio.biz> To: The Club Cafe <club_cafe@bivio.com> Sent: Monday, September 29, 2014 12:37 PM Subject: [club_cafe] BAIDU (BIDU) 1 Year Price Projection
I have been puzzled for a while about why Yahoo shows the 1 year price projection for BIDU to be so high. Currently it shows as $1571.31. Considering the current price of BIDU is $220.49, that's a pretty significant upside potential!
I finally got a few minutes to try and sort out what is going on. As is usually the case when there's a question about stock data, the best answer can be found by going to the official earnings reports on the company website.
On the BIDU site, I found that for the most recent quarter, BIDU earned $10.09 RMB (Renminbi, the official currency of China) per share which, at the
time of the report was equal to $1.63 US Dollars per share. A conversion factor of about 6.56 RMB/US$
If you divide the Yahoo 1 year projection of $1571.31 by this conversion factor, you get a projected 1 year price of $239.53 which is more in line with the current US dollar price of BIDU. If you want to get a quick and dirty idea of what kind of upside potential there might be in BIDU, that, or a comparison at the current exchange rate of 6.15 RMB/$ would be the comparison to make.
Perhaps Yahoo shows the projected price in RMB because otherwise it would have to change daily along with the exchange rate. I'm not sure.
But it is something to be aware of if you are invested in this or any other foreign stock.
Laurie Frederiksen Invest with your friends! www.bivio.com