Trade-Ideas LLC identified

Yahoo

(

YHOO

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Yahoo as such a stock due to the following factors:

  • YHOO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $560.7 million.
  • YHOO has traded 5.6 million shares today.
  • YHOO is up 3% today.
  • YHOO was down 5.2% yesterday.

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More details on YHOO:

Yahoo! Inc., together with its subsidiaries, provides search and display advertising services on Yahoo properties and affiliate sites worldwide. Currently there are 18 analysts that rate Yahoo a buy, no analysts rate it a sell, and 8 rate it a hold.

The average volume for Yahoo has been 14.7 million shares per day over the past 30 days. Yahoo has a market cap of $35.6 billion and is part of the technology sector and internet industry. The stock has a beta of 2.16 and a short float of 4.9% with 2.65 days to cover. Shares are up 7% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Yahoo as a

hold

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • Although YHOO's debt-to-equity ratio of 0.04 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 5.92, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has significantly increased by 112.45% to $365.77 million when compared to the same quarter last year. In addition, YAHOO INC has also vastly surpassed the industry average cash flow growth rate of 19.50%.
  • The gross profit margin for YAHOO INC is rather high; currently it is at 64.18%. Regardless of YHOO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, YHOO's net profit margin of -9.12% significantly underperformed when compared to the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet Software & Services industry. The net income has significantly decreased by 568.1% when compared to the same quarter one year ago, falling from $21.20 million to -$99.23 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Internet Software & Services industry and the overall market, YAHOO INC's return on equity significantly trails that of both the industry average and the S&P 500.

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