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发帖数: 1972 | 1 http://seekingalpha.com/article/301271-why-you-should-sell-shar
Yahoo! Inc (YHOO) is one of the big names in internet services. Along with
Google Inc (GOOG) and AOL Inc (AOL), there are not many internet users that
do not use its services in their time in front of the computer screen.
Whether it’s connecting to others via a Yahoo! Email account, or using its
instant messaging offering, using its search engines, or looking up news
items, the chances are that most readers of this article will use Yahoo!
services.
Yahoo! Inc shares are currently trading around $16, and the mean 12 month
price target from analysts researching the stock is $17.54 (9.6% upside
potential). This stock is trading higher than its 50-day exponential moving
average of $14.62 and its 200-day exponential moving average of $15.07.
These averages have flattened out after showing a gradual decline from May
through August, as the shares fell from their 12 month high of $18.84 to
their 12 month low of $11.09. This dramatic fall was in part due to weaker
than expected results for the second quarter 2011 but more due to the
posturing by the Alibaba Group (ALBCF.PK) over the jointly owned Alipay, a
payments company in China. The arguments over ownership were resolved at the
end of July, and since this time Yahoo! shares have regained their poise in
the market. Earnings per share for the last year were $0.88, though these
are expected to fall to $0.83 in its next fiscal year (ending Dec 2012).
These numbers place the shares on a trailing price-to-earnings ratio of 18.
23, and a forward multiple of 19.37.
Like its main rivals, Google and AOL, Yahoo! does not pay a dividend.
Current operating margin at Yahoo! is 15.16%, with a return on assets of 3.
62% and a return on equity of 9.45%. The current revenue from its income
statement is $5.57 billion, though revenue as reported in its second quarter
showed year-on-year decline of 23.30%. The company has cash of $2.55
billion, and a total of just $40 million in debt. The company’s debt/
equity ratio is 0.31, lower than AOL’s 5.16 and Google’s 13.24.
(Click chart to expand)
Looking at the 12-month chart, Yahoo! has regained ground lost in the middle
of the year, and is now trading on a par over the 12 month period with the
S&P 500 (SPY) Index, and is faring a little better than Google. The recent
rise has been aided by bid talk surrounding the company, with Alibaba and
Microsoft (MSFT) both considering a purchase. Indeed, analysts valuation of
Yahoo! centres around the $16 to $18 mark, some way below the $33 per share
that Microsoft offered for the company three years ago.
Yahoo! is in play and seems keen to find a suitor, or a combination of
suitors, that will be willing to pay top dollar for the company. The share
price has reacted accordingly, though has still not reached its 12-month
high. This is a deal that seems likely to go through, though the identity of
the eventual buyer remains to be seen. If the potential buyers were to pull
out of any potential deal, the share price would fall back. With
speculation of price and eventual bidder in the public domain, I believe
there is greater downside risk than upside potential. Investors should avoid
for the time being, perhaps waiting until the terms and eventual buyer are
known, and then only buy if wanting to own shares in the combined group.
AVOID. |
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