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Trade idea: Short "over-valued" Qihoo
Shares of China's Qihoo, a software and technology company quoted in New York, have shot up this year (NYSE: QIHU). Beijing-based trader Fredrik Oqvist, CEO of ChinaRAI, says the shares are completely over-valued and the company "needs to be brought back down to earth". His trade idea is to short the company this Monday.
Fredrik says there has been speculation growing over whether Qihoo will grow its search market share by as much as 30% next year, but Fredrik says this is unlikely. An example of how Qihoo, which provides Internet and mobile security products in China , is assessed too highly is that the stock is currently trading at a P/E ratio of 236, whereas rival Baidu is trading at 25.Qihoo is currently trading at $69.44 and says he expects the play to last half a year.The company's reporting report Q2 earnings results before the market opens on 26 August.
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