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Yahoo! Inc. Message Board

  • gollywogazoo gollywogazoo Jan 31, 2013 7:23 PM Flag

    why does Wall Street hate this company?

    even with the recent run up in price, the stock has a very low P/E of around 6, when compared to its peers, oodles of cash on its balance sheet & zero debt. Not to mention improving fundamentals across its entire platform.

    I just don't get this low valuation?

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    • "WALL STREET" is NOT a person. It doesn't love or hate anything. What you see is the collective opinion of ALL investors everywhere. That opinion suggests,, based on the last four years, a badly managed company, weak product lines, no vision , a board with an inflated value of the company, no potential buyers at an acceptable price, and a questionable future. The "low" valuation is justified.

    • Its PE isn't 6 btw. unless you're expecting them to unload another $7B of an Asian asset. It made $1.17, for the year, which means its PE is 16.7. IDK, what the peers are off-hand as both Google and Apple were low-to-mid teens last I checked. Yes, it has oodles of cash but the return on that money is less than 1% interest and needs to invest it in companies that will grow revenue. The brings us to the next portion "improving fundamentals"...not really as you could look at Q4 2011 and Q4 2012 and not tell the difference. Their revenue shouldn't have been 2% growth for the 2nd year in-a-row when online advertising is growing double digits. Display ads are in trouble down 11%, if I remember right. Operating income fell 22% from $220M to $190M. Here are the positives: They got more search money charging higher prices and their investment income went from $450M, last year, to $676M this year. I'm not aware of a solid strategy nor huge gamechanging products on the horizon. If so tell me as I didn't listen to the conference call. For Yahoo, to go all "momo" you need huge growth its why barely profitable stocks like Amazon, ISRG, and Priceline have gone to the moon. Yahoo also doesn't dominate in anything anymore requiring a leaders premium. Its kind've a weird company in that it won the lottery, has a vault worth of cash but is so scared to lose it that they sit on it instead of improving the vault so to speak even though it has countless tourists visit it everyday. Where is the merchandising and trinket selling?lol

 
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