Is Yahoo a Buy?
Yahoo is hitting not just a 52 week low, but a 104 week low. http://finance.yahoo.com/q/bc?s=YHOO&t=2y&l=on&z=m&q=l&c= The fundamental looks great at this point. Profit Margin (ttm): 21.11% Return on Equity (ttm): 15.40% Revenue (ttm): 5.97B Revenue Per Share (ttm): 4.233 Total Cash (mrq): 2.69B Total Cash Per Share (mrq): 1.947 % Held by Insiders: 10.25% The insides have a 10% stake in the company, which is a very large size for a company this huge. Looking at the chart, Yahoo has been dropping for some time. The biggest question is, "Has Yahoo's stock bottom out yet?"
posted by Sean @ 10/18/2006 10:53:00 PM
2 Comments:
YHOO has been on my watch list for years, but I've never before considered it to be a "value" stock. You have brought up some very good points here. As to whether or not the stock has bottomed out: I don't know. It is worth looking at more closely. I skimmed through the S&P report for YHOO, and didn't find anything significantly negative. But based on the most recent charts, I don't think that you need to rush to buy right now. I'm going to keep my eye on this one. Thanks for the information.
The question is how do the fundamentals compare year over year, and to other companies like Google. If revenue is risingyear after year, and earnings as well, then it may be a buy. Also, compare it to Google - who is making more money?
I also had a look at Yahoo's P/E ration - 47. That is high for any company (but lower thank Google's). I would not call it cheap as it appears that investors are still placing a high premium on this "new economy" stock. Are you comfortable that investors will continue to pay a preimum - or will it drop like MSFT did to a P/E in the low-20's.
To make a long story short, I don't think it has bottomed. Keep in mind though, I sold Merck at ~$32 and am watching if hit ~$42 now.
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