Kennard Allen: Chinese Internet Stocks Look Attractive

In spite of their high valuations, T. Rowe Price (NASDAQ:TROW) fund manager Kennard Allen is bullish on Chinese Internet stalwarts Baidu (NASDAQ:BIDU) and Sina (NASDAQ:SINA), given that China’s still-low Internet penetration rate of 36% leaves plenty of room for growth. On the flip side, Allen isn’t a fan of IT services firms such as Accenture (NYSE:ACN) and Cognizant Technology Solutions (NASDAQ:CTSH), citing the potential for cloud services to automate labor-intensive technology processes.

Internet penetration in China (NYSE:FXI) hovers around 36 percent, despite more than 485 million users. The potential for growth is huge as user sophistication remains low outside big cities.

Here’s how these stocks are performing as the year comes to a close:

T. Rowe Price Group, Inc. (NASDAQ:TROW): TROW shares recently traded at $57.37, up $1.08, or 1.92%. They have traded in a 52-week range of $44.68 to $71.29. Volume today was 184,596 shares versus a 3-month average volume of 2,583,950 shares. The company’s trailing P/E is 19.65, while trailing earnings are $2.92 per share.

Baidu, Inc. (NASDAQ:BIDU): BIDU shares recently traded at $114.83, down $1.67, or 1.43%. They have traded in a 52-week range of $96.53 to $165.96. Volume today was 1,377,348 shares versus a 3-month average volume of 7,416,120 shares. The company’s trailing P/E is 44.20, while trailing earnings are $2.60 per share.

Sina Corp. (NASDAQ:SINA): SINA shares recently traded at $53.00, down $0.09, or 0.17%. They have traded in a 52-week range of $46.86 to $147.12. Volume today was 793,499 shares versus a 3-month average volume of 5,893,420 shares. The company’s trailing earnings are $-6.42 per share.

Accenture plc (NYSE:ACN): ACN shares recently traded at $53.15, up $0.29, or 0.55%. They have traded in a 52-week range of $47.40 to $63.66. Volume today was 510,699 shares versus a 3-month average volume of 3,874,990 shares. The company’s trailing P/E is 14.95, while trailing earnings are $3.55 per share.

Cognizant Technology Solutions Corp. (NASDAQ:CTSH): CTSH shares recently traded at $63.45, up $0.28, or 0.44%. They have traded in a 52-week range of $53.54 to $83.48. Volume today was 236,273 shares versus a 3-month average volume of 2,809,760 shares. The company’s trailing P/E is 23.25, while trailing earnings are $2.73 per share.

To contact the reporter on this story: Tanya Harding at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com