Sticking with emerging market search engines, Tiger Global increased its stake in Baidu.com, Inc. (NASDAQ:BIDU) by 45% during Q3 to a total of almost 2.2 million shares. William Gray’s Orbis Investment Management was another major investor in the Chinese company, with 3.2 million shares in its own portfolio (check out Orbis's stock picks). Baidu has been reporting high growth as well, as earnings were 60% higher in its most recent quarterly report than in the same period in 2011. The stock price has fallen 20% in the last year, possibly due to concerns over Chinese macro and accounting controls, but analyst expectations imply strong growth and a five-year PEG ratio of 0.7.
TAL Education Group (NYSE:XRS), a Chinese tutoring services company, was another emerging markets stock in the fund’s portfolio which boasts a low PEG ratio (0.6 in this case). Again, the Chinese association may be harming the valuation: growth has been high, but the stock is down 25% since a year ago and the trailing P/E is 19. While that is a bit high for a pure value stock, earnings growth is expected to continue here as well. We think that either of these Chinese stocks are worth researching though investors should note the concerns about the country and possibly adjust any position sizes accordingly.
Tiger Global initiated a position of 700,000 shares in Mellanox Technologies, Ltd. (NASDAQ:MLNX), a $2.3 billion market cap semiconductor company. Renaissance Technologies, founded by billionaire Jim Simons, was also buying the stock in the third quarter of 2012 (find Renaissance's favorite stocks). The trailing and forward P/Es here are 21 and 15, respectively, with Wall Street analysts expecting continued high growth (though almost certainly at a slower rate than what the company has been experiencing recently).
Disclosure: I own no shares of any stocks mentioned in this article.