This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Buy Intel, Yahoo! and Alcoa; Sell Infosys

Yahoo! continues to be one of the most misunderstood companies on Wall Street. But the company understands itself and its goals. It appears to have a firm grasp of what is at stake in terms of its future. With the stock trading at $15.74, it is down by almost 15% from the average analyst target of $18.00. Though this also comes with a hold recommendation, I would consider buying Yahoo! at this level ahead of earnings to possibly capitalize on a quick spike upward.

Reason to Sell Infosys

One of last week's disappointment arrived at the hands of Infosys, which released earnings on Thursday and prompted analysts to ask, " will it survive?" For the quarter, though its revenue increased by almost 5%, the company reported earnings per share of 73 cents -- missing consensus estimates by a penny.

On the announcement, Needham & Company analysts reiterated their "hold" rating on the stock. The stock dropped as much as 14% after the report though it has since then rebounded slightly. I still see potential downside risk in the shares until the news completely wears off. I think the stock is yet expensive with a P/E of 13 and if you are a holder of the stock, you might consider selling at current levels with a possibility of entering back in at the $35 range -- saving an extra 10%.

Bottom Line

Earnings season can be both an exciting time as well as one that brings a lot of anxiety for companies as well as investors. It's called the reporting period for more than one reason as companies are essentially sharing their quarterly report cards -- where getting a passing or failing grade often depends on the expectations that were set.

In this article, there was Alcoa passed where Infosys fell short. Yahoo! and Intel have yet to report and their track records suggest buying ahead of the report may be a smart thing to do. Let's hope we're right.

In my next article, we're going to look at possible earnings plays in IBM (IBM), Qualcomm (QCOM) and Bank of America (BAC).

At the time of publication, the author held no position in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

3 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Submit an article to us!
SYM TRADE IT LAST %CHG
AA $14.15 0.00%
INFY $31.19 0.00%
INTC $33.42 0.00%
YHOO $42.51 0.00%
AAPL $128.95 0.00%

Markets

DOW 18,024.06 +183.54 1.03%
S&P 500 2,108.29 +22.78 1.09%
NASDAQ 5,005.3910 +63.9670 1.29%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs