This Day On The Street
Continue to site
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

3 Internet Stocks Ready to Move Higher

NEW YORK ( TheStreet) -- On Monday, I touted Zynga (ZNGA - Get Report) as a short-squeeze candidate.

It turns out my timing could not have been better. The stock bucked a decidedly bearish trend to blow past the psychologically important $5 mark. Zynga reports earnings on Wednesday. If it beats, raises guidance or shows its hand a bit more with regards to online gambling, a move into double digits in short order is not out of the question.

As I explained in the above-cited article, Zynga has several strong constants -- no debt, massive revenue and a first-mover advantage -- as well as many potential catalysts that could burn traders and investors with short positions in the stock. There's no question that short covering fueled a good bit of Monday's move past $5.

That said, do not mistake my ZNGA bullishness as a call to go all-in. It's still a highly speculative and volatile stock, especially around earnings, a time when you should always proceed with caution. An earnings miss or lowered guidance could send the shares reeling to new all-time lows.

But I hope readers take something more universally applicable away from my ZNGA bull case.

Just as you have to be careful going long a stock like ZNGA, you must keep potential catalysts in the back of your mind that could make it fly on a moment's notice. Often, the media and, in turn, investors overdo bearishness in a stock like ZNGA. These misconceptions of reality can burn you if you're short or keep you away from one of the market's better long-term plays.

Assess the bearishness like anything else, but don't let it cloud all objectivity.

Watch Pandora's Royalty Payments

Along similar lines, consider Pandora (P - Get Report). Of all of the things that could move this stock higher, the situation surrounding music royalty payments deserves greatest attention. Certainly, an earnings beat next month would catalyze Pandora as it would Zynga.

But thinking long-term, a new and more favorable royalty structure matters more. Ever since Pandora went public, the high cost it pays to stream songs dominates the bear case. And there's no question, Pandora commits way too much revenue to content acquisition. The company knows this. It continues to actively work to improve the situation.
1 of 2

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
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
ZNGA $2.38 0.00%
AMZN $659.59 0.00%
FB $117.58 0.00%
P $9.93 0.00%
AAPL $93.74 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs