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

I Love Yahoo!'s Earnings Results and You Should, Too

NEW YORK ( TheStreet) -- Yahoo! (YHOO - Get Report) is an example of an undervalued company anchored in preparation and continued share-price-appreciation ability. The old-school online portal is transforming itself into an aggressive marketshare taker and investors are taking notice.

That's what I wrote in "Yahoo!: The Best Is Yet to Come," and Tuesday's outstanding earnings release validates those words.

The summer heat be damned, shareholders need to get up and "Yahooooo!" at least once at the top of their lungs after last quarter's performance. It's everything and more than you can ask for. Yahoo!'s CEO Marissa Mayer is from Wisconsin (Go Pack!) and is on day 366 of one of the greatest turnaround stories of our time. Yes, a considerable proportion of share demand is driven by Yahoo!'s stake in Web site Alibaba, albeit that only tells part of the story.

If Yahoo! is a pure Alibaba play than perhaps you can argue the stock is trading near the right price -- but it's not. In fact, let's take a moment to temper our enthusiasm over Alibaba's potential valuation. We all know how well unbridled enthusiasm worked out for Facebook's (FB) IPO investors.

Also, China's regulators halted IPOs seven months ago while over 700 companies sit on their hands and wait for the green light. We have two or more potentially conflicting conjectures to consider.

Once the Middle Kingdom more fully embraces the free market again, Chinese investors will have a myriad of new investment choices. If regulators and underwriters screw it up, the flood of new offerings may resemble to investors what happens to a small town under a failed dam that lets loose a mountain of water.

Chinese regulators are new on the job and still figuring it out, but they are unquestionably smart. They will as soon realize the unintended consequences outweigh the false postulation of their desired price stability objectives.

Alibaba may list again on the Hong Kong exchange, avoiding IPO restrictions. For many, listing in Hong Kong may appear as a "no-brainer," but that ignores the political implications and considerations.

Alibaba is a unique asset and potentially a showcase for China's might, economic influence, and ability to attract equity capital into Shanghai. Don't expect an exclusive Shanghai listing, but also don't let it surprise you either. Of course, a dual listing shouldn't surprise anyone. Bottom line, YAHOO! may not receive as strong of a boost as some predict, but it doesn't need to.
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
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
YHOO $37.84 0.00%
AAPL $122.77 0.00%
FB $94.20 0.03%
GOOG $627.26 0.00%
TSLA $253.39 0.15%

Markets

Chart of I:DJI
DOW 17,440.59 -127.94 -0.73%
S&P 500 2,067.64 -12.01 -0.58%
NASDAQ 5,039.7760 -48.8540 -0.96%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs