Yahoo (YHOO) Rising Before The Market Opens

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified Yahoo ( YHOO) as a pre-market leader 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 $567.1 million.
  • YHOO traded 172,879 shares today in the pre-market hours as of 7:27 AM.
  • YHOO is up 5.6% today from yesterday's close.

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More details on YHOO:

Yahoo! Inc. provides search and display advertising services on Yahoo properties and affiliate sites worldwide. YHOO has a PE ratio of 5.4. Currently there are 18 analysts that rate Yahoo a buy, no analysts rate it a sell, and 9 rate it a hold.

The average volume for Yahoo has been 13.1 million shares per day over the past 30 days. Yahoo has a market cap of $39.4 billion and is part of the technology sector and internet industry. Shares are down 16.8% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Yahoo as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, reasonable valuation levels and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • YHOO's revenue growth has slightly outpaced the industry average of 5.8%. Since the same quarter one year prior, revenues slightly increased by 8.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • YHOO's debt-to-equity ratio is very low at 0.04 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 4.44, which clearly demonstrates the ability to cover short-term cash needs.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Internet Software & Services industry and the overall market, YAHOO INC's return on equity exceeds that of both the industry average and the S&P 500.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.

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