Despite the wild ups and downs it has created, this year’s tug-of-war between the bulls and bears hasn’t amounted to much. To date, the Dow Jones Industrial Average has been flat, while the S&P 500 has dropped a little more than 4%. We’ve essentially been on a hellish rollercoaster ride to nowhere…

This sort of behavior from the broader market, however, superbly illustrates the advantage of good stock picking in an uncertain economy. While the market twists, turns, spasms and gyrates, only to end up about where it started, certain stocks manage to come out ahead — far ahead in some cases. And I don’t mean ultra-risky stocks of microscopic companies that gain 300% one day and then lose it the next, either. I’m talking about the stocks of major firms with popular products and services, outstanding revenue growth, strong balance sheets and excellent prospects for the future.

The stock of one such firm has risen 22% in the past three months (as a comparison, the S&P declined almost 7% during the same time) and is up more than 50% year-to-date. Since it debuted on the Nasdaq in 2006, it has returned an average of 79% annually.

I’m referring to Baidu Inc. (Nasdaq: BIDU), a $51 billion firm widely seen by investors as the “Google of China.”

Baidu launched in 2000, two years after Google (Nasdaq: GOOG). Since the launch, Baidu has become by far the leading Chinese-language Internet search engine. It currently owns 76% of China’s search engine market. In other words, 76% of the people in China who use the Internet use Baidu’s search engine. The company’s nearest rival is actually Google, which has about 20% of market share in China.

Baidu generates revenue mainly through advertising from a client base of about 220,000 small and mid-size businesses. It grew at an astounding rate of 75% annually from 2006 through 2010, jumping from $838 million to $7.9 billion. Trailing 12-month revenue has topped $10.5 billion, and analysts predict a 39% growth rate for the next five years — a pace that would pump annual revenue up to $54.5 billion by the end of 2016.

And this could be a conservative estimate. Although Baidu dominates in market share, its advertising client base is only 0.5% of the roughly 40 million small and mid-size businesses registered in China. So even if the company only upped its base to 3%, or 1.2 million users, then sales could top $57 billion, assuming revenue per client stayed at the current average of about $47,700 ($10.5 billion of revenue divided by 220,000 clients). If the client base rose to 5%, or 2 million users, then the company would likely see annual revenue north of $95 billion. Again, this is assuming it kept generating $47,700 from each of its clients, which pay Baidu every time someone clicks on the ad links that accompany Baidu search results.

These estimates seem even more feasible when you consider the number of Internet users in China is projected to climb from the current 530 million to more than 830 million by 2018. Current users do an average of about 70 Internet searches per month, so the yearly total of searches is set to rise from about 445 billion to nearly 700 billion in 2018. With its huge market share, Baidu is positioned to benefit immensely from this trend.

In the meantime, to supplement ad revenue and diversify, Baidu has begun to seek other growth opportunities, such as online video and real-estate listings. In its biggest investment to date, for example, the company paid $306 million to become a majority owner of China’s leading travel website, Qunar. In addition, Baidu Ting, the company’s MP3 search service, has been working deals with several major record labels to provide licensed music files to stream or download for free.

Baidu is in great shape financially. At $3.7 billion, free cash flow is more than 10 times what it was just five years ago. Shareholder equity has been rising steadily, from $1.4 billion in 2006 to $8.4 billion at the end of 2010. Earnings per share have also been phenomenal, spiking from $0.88 to $14.05 during the past five years — a substantial yearly growth rate of 74%.

Risks to consider: This is a growth stock that pays no dividends, so it can be very volatile. Also, Baidu is likely to face increasing competition for advertising revenue from websites such as Alibaba and Sohu (Nasdaq: SOHU), which are looking to grab a share of China’s search-engine market.

Action to Take –> Unfortunately, the days of superfast expansion are probably coming to a close for Baidu, so don’t look for shares to deliver 79% a year anymore. However, analysts still expect much faster-than-average growth in the future and predict earnings will surge by 42.5% a year for the next five years. Analysts expect upside for the stock to be in the range of 60% to 135% during this same period. With such strong prospects, this is definitely a good stock to consider owning.