What does "underweight" mean in?

"Video-search services will be the highways people use to get to the content they want." Richard Ji, from Morgan Stanley Asia said. He rates Baidu's shares "underweight, attractive."

I am confused. Pls also refer to the explanation below. If underweight means an analyst will downgrade a stock, why Richard considers Baidu's stocks attractive?

Underweight
A recommendation for investors to decrease their investment position in a particular security, sector, asset class, or market. Brokerage firms such as Morgan Stanley and JP Morgan use 鈥淯nderweight鈥?when downgrading a stock. Antithesis of Overweight.

maybe he means not too attractive.

Back in the days before modern portfolio allocation, there was no such term in the lexicon of broker recommendations. Now in our ultra sophisticated investment climate, the concept is that one should invest in a broad range of holdings spanning many different industries and geographies to minimize risk and maximize return. Within this concept some industries and geographies are more attractive at certain times than others and the super sophisticated stock analysts like to use the terms over weight and under weight rather than buy and sell.

Interestingly enough, portfolio re-balancing suggests perhaps the opposite might be true. That is buy less attractive stocks and sell the more attractive stocks. Studies have shown that periodically rebalanced portfolios tend to outperform those that are not rebalanced. Seems somewhat counter intuitive to me. I like to go with the winners.

that's his opinion

Analysts like Richard Ji have as their main clients institutional investors. Institutional investors (like pension or endowment funds) measure their performance vs a benchmark like the S&P 500. What many do is essentially own the index (i.e., own every stock in the index), but own them in weights that differ from the weights in which the index holds them. For instance, if BIDU is 0.3% of the S&P 500 Index, and Richard Ji says that it would be smart to be "underweight" BIDU, then an investor who stays pretty close to the index might put 0.2% of his/her fund in BIDU. That is the theory of the term. In practice, Richard's "underweight" is the equivalent of a "sell," or don't buy opinion.