Raw Greed morning report

Posted on March 16, 2006 , filed under Stocks | Print This Post

Good Morning, let’s get started. Today I am watching YHOO, Yahoo! Inc. The stock is currently trading in the low $30’s, down from a recent high of $43.66 set on January 9th, 2006. I believe YHOO’s recent drop has much to do with the drop in GOOG, Google Inc. Google has dropped over a variety of problems that have created investor fear and that fear is likely trickling over to Yahoo. Google is facing some difficulties from click fraud lawsuits, public backlash over its decision to censor content in China, accelerating revenue to exceed the high expectations of analysts, and in creating new services to maintain the company’s amazing growth rate.

I believe Yahoo is an older and more mature company in the search market. I like the company’s conservative approach to using capital and rolling out new services. Yahoo recently scrapped plans to create its own customized content and the company is slowly rolling out its Yahoo Publisher service for advertisers. Yahoo appears to have learned several lessons from the .com crash that collapsed high flying companies that were spending money without realizing any revenue from the services they created. I wrote a previous post about Yahoo and the company is one of my former picks. I originally purchased YHOO at $33.97 and I sold the stock at $38. You can click the predictions link at the top of the page to view my original price targets for the company. While I once purchased YHOO close to $34, I would not recommend purchasing the stock at today’s prices. I believe negative sentiment may build around Google and YHOO shares will likely further drop as an after effect. I like YHOO at under $28. The stock is currently trading at low $30’s.

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2 Comments »

Comment by trinh pham

2006-03-16 19:40:16

Andy, you bought it at 34 almost, why wouldn’t you like it at the low 30’s?

Didn’t you say you like yhoo below 33?

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Comment by Andy

2006-03-16 21:07:44

Hi Trinh, I believe Yahoo is being dragged down by speculation surrounding Google Inc. If there was no negative news surrounding Google I would likely have picked up shares of YHOO at today’s prices. I have revised my short term target purchase price for YHOO to under $28.

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