Yahoo! Inc (YHOO): Today's Featured Internet Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Yahoo ( YHOO) pushed the Internet industry lower today making it today's featured Internet laggard. The industry as a whole closed the day down 0.1%. By the end of trading, Yahoo fell 20 cents (-1.3%) to $15.68 on average volume. Throughout the day, 20.6 million shares of Yahoo exchanged hands as compared to its average daily volume of 17.8 million shares. The stock ranged in price between $15.65-$15.87 after having opened the day at $15.85 as compared to the previous trading day's close of $15.88. Other companies within the Internet industry that declined today were: Authentidate Holding Corporation ( ADAT), down 8.1%, ExactTarget ( ET), down 5.5%, LiveDeal ( LIVE), down 5.4%, and Travelzoo ( TZOO), down 4.3%.
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Yahoo! Inc., together with its subsidiaries, operates as a digital media company that delivers personalized digital content and experiences worldwide. Yahoo has a market cap of $18.86 billion and is part of the technology sector. The company has a P/E ratio of 17.9, below the average internet industry P/E ratio of 18.1 and above the S&P 500 P/E ratio of 17.7. Shares are down 1.5% year to date as of the close of trading on Friday. Currently there are five analysts that rate Yahoo a buy, one analyst rates it a sell, and 20 rate it a hold.

TheStreet Ratings rates Yahoo as a buy. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

On the positive front, Remark Media ( MARK), up 6.3%, Vipshop Holdings Ltd ADR ( VIPS), up 4.2%, Jiayuan.com International Ltd ADR ( DATE), up 3.9%, and Web.com Group ( WWWW), up 3.6%, were all gainers within the internet industry with Rackspace Hosting ( RAX) being today's featured internet industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the internet industry could consider First Trust Dow Jones Internet Idx ( FDN) while those bearish on the internet industry could consider ProShares Ultra Short Technology ( REW).

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