5) Don't Touch Yahoo!!
Little has changed in investors' perception of
(YHOO - Get Report)
after the company's lackluster earnings announcement earlier this week. The new CEO, Scott Thompson, didn't mention any new strategic plans. And, the company said zilch about a possible sale of its Asian assets during the post earnings conference call.
The company's income came in line with expectations, although revenue was a little light at $1.17 billion. Clearly, attempts to cut costs and hold market share in display advertising aren't working. Yahoo continues to fade against rivals Facebook and Google.
Credit Suisse says it's taking a "wait-and-see approach" with Yahoo. The firm lowered its fiscal year 2012 earnings estimate "to reflect a 5% reduction in net revenues given macro-uncertainty and the potential for market share pressure and lower margins owing to dilution from the Interclick acquisition and possible reinvestment spending."
Jefferies has a hold rating on the stock, writing that in the "short term, the stock should continue to meander with news flow about Asian assets' monetization; longer-term, increased investments may re-accelerate growth, but such an outcome is far from certain."
"Yahoo's results indicate sustained market share losses with no sign of a turnaround," write analysts at Benchmark.
At this point, it seems that shareholders' only hope for Yahoo is that it will restructure the Asian assets to unlock value. But given the complexities in taxes involved in a potential deal, investors shouldn't expect groundbreaking developments on that process any time soon.
-- Written by Chao Deng in New York.
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