Yahoo! also owns 35% of Yahoo! Japan. One would think Yahoo! Japan is entirely owned and operated by Yahoo!, but that's not the case. The excellent news is the 35% is worth about $9 billion.

There is considerable debate over the Yahoo! Japan valuation, especially between Yahoo! and Yahoo! Japan. If we discount the net valuation expected valuation to Yahoo! shareholders, we can add $6 billion more.

Adding Alibaba and Yahoo! Japan holdings brings us up to at least $31 billion. Add $2 billion in excess cash, and Yahoo!'s $39 billion market cap begins to appear closer to $6 billion -- or less.

When viewed from that angle, the forward estimated earnings multiple shifts from 21 toward 3.3, making Yahoo!'s stock remarkably cheap. Yahoo!'s board is also convinced the shares are trading at an extremely attractive price and continues to authorize massive share buybacks.

Normally, I'm not impressed when a company's board authorizes large share repurchases. Management teams seem to get it wrong and buy at the top more often than not, and the vast majority of companies, especially tech companies shouldn't try to play the asset manager role and stick to what they know best. In other words, unless your business card says 'fund manager," don't try to invest like one.

Another red flag with share repurchases is that despite sometimes gargantuan salaries, management can't find an alternative use for working capital. The exception is when shares are incredibly undervalued to the point that management rightfully fears looking incompetent for not buying. That is where I place Yahoo!'s stock. It's so cheap that few other investments can match the return.

Where else can you buy as much as you want for only three to four times forward earnings? Nowhere else, and that is why Yahoo! is quickly moving higher toward $40 once again. You have a chance to buy at a discount, albeit don't expect it to remain available for long.

At the time of publication, Weinstein had no positions in securities mentioned.

Follow @RobertWeinstein

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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