Vishesh Kumar
Despite losing one-quarter of their value in the past three months, shares of Yahoo!(YHOO Quote - Cramer on YHOO - Stock Picks) are still too expensive.
Last week, the stock of the Internet giant hit lows not seen since March 2004, prompting speculation about whether the stock was a bargain. That seems to be the position of Yahoo! President Sue Decker, who decided to shell out $1.1 million for her first open market purchase of Yahoo!'s stock in two separate transactions last week. Decker's buy was widely read as a bullish sign for Yahoo! shares, which closed Monday up 2.6% to $24.57. That's especially true given Decker's extensive background as an equity research analyst, suggesting she has a better understanding of how Wall Street will value the company than most executives. But investors should take a hard look at Yahoo! themselves, rather than simply follow Decker's lead. And that close look reveals a company that continues to command a lofty valuation despite being riddled with problems. Rather than see Decker's move as a cue to buy, investors are better off avoiding Yahoo! for better-performing Internet companies that trade at a much more reasonable valuation.
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