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 2.6%. By the end of trading, Yahoo fell $0.89 (-3.4%) to $25.35 on average volume. Throughout the day, 18,684,312 shares of Yahoo exchanged hands as compared to its average daily volume of 16,499,200 shares. The stock ranged in price between $25.23-$26.05 after having opened the day at $26.03 as compared to the previous trading day's close of $26.24. Other companies within the Internet industry that declined today were: Mediabistro ( MBIS), down 9.2%, Vipshop Holdings Ltd ADR ( VIPS), down 8.8%, ChinaCache International Holdings ( CCIH), down 6.3% and MeetMe ( MEET), down 6.2%.
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Yahoo! Inc., a technology company, provides search, content, and communication tools on the Web and on mobile devices worldwide. Yahoo has a market cap of $28.9 billion and is part of the technology sector. The company has a P/E ratio of 7.8, below the S&P 500 P/E ratio of 17.7. Shares are up 31.9% year to date as of the close of trading on Wednesday. Currently there are 11 analysts that rate Yahoo a buy, 1 analyst rates it a sell, and 14 rate it a hold.

TheStreet Ratings rates Yahoo as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income, notable return on equity, reasonable valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

On the positive front, Net Element International ( NETE), down 6.2%, ModusLink Global Solutions ( MLNK), down 3.8%, Innodata ( INOD), down 2.6% and Ixia ( XXIA), down 1.6%.

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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