Yahoo!, Inc. (YHOO)

Still think they will be a takeover target and a premium will be paid.

Yahoo is the internet leader in Emails and homepage settings. They are right in the middle of all the demand.

Turnaround in progress.

allstarportfolio

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Look, I'm not even looking at Yahoo's financial numbers. Yea, that's right, I don't care what GURU INVESTORS have say about my pick. This company does not need much explanation. Its share price have dropped far less than its real value. Yahoo will strive, sure they are inferior to Google, but they will strive, and this price right now is worth very little to what Yahoo is actually worth.

testing low caps

i would buy this stock because yahoo is a reliable internet. Alot of people use it.

YAHOO will continue to grow it's market share
in the search engine category. With this growth in market share will come increased revenues from online adverizing and open the door to future growth opportunities. Google has failed to change it's search engine interface with changing times. Yahoo may be cluttered and confusing at times but when you break down into individual site sections the quality of the information and layout (example yahoo finace) is great! Combine this with a possible deal with Microsoft's rising star BING and you have a real winner over the next few years. YHOO is undervalued at it's current price.

The call vs S&Prated it as an out preforming stock.

a lot of people use yahoo and what they have to offer

i love this stock because yahoo is going to be around and it is a good investment and it make good money.

Yahoo is one of the main email websites. Great source.

because everyone is using it

Yahoo is one of the largest Internet sites. It has millions of users a
day.

So here is my take:

Yahoo has cash flow- a lead in online advertising sales- an aggressive relationship with key partners worldwide alibaba, ect.)- and a "strategic" relationship with Microsoft against Google. I don't think $40 a share by January of 2011 is unreasonable given the totality of the vision and execution.

Also I also prefer Yahoo as a stand alone "strategic" partner with Microsoft as they are able to move much more quickly that as part of the giant Microsoft empire...

Current 16.86, Sept 21 09. Limit 15.55

Newly designed email which I personally find very easy to use and strong marketing campaigning might breathe new life into the stock short term.

TigerPack (99.98) wrote:

Yahoo! (YHOO) is a great value proposition with nearly $9 billion in net assets, mostly liquid, when measured against a $21 billion market cap. Please name another brand-name, blue-chip internet company, earning substantial sums of money, selling at 2 times its liquid book value? Answer: another one does NOT exist. In fact, Yahoo! has become the new-age media conglomerate that every newspaper, internet content provider and television network has been expending billions of dollars trying to emulate. Basically, YHOO is “the” new national newspaper, and the redesign of its home page the last few months, including direct links and partnerships with the likes of Ebay and Facebook and every other important online player is solidifying its position as preeminent going into a new economic advertising cycle.

2009's “free” cash flow yield will be THE HIGHEST in the company's history for investors based on the low stock price currently, AND THAT IS CALCULATED AT A BOTTOM IN THE OVERALL ECONOMY. The “free” cash flow yield today is around 5%, BEFORE a pick-up in the economy and advertising activity, plus the positive effect of the Microsoft search deal. In years past, YHOO has traditionally sold at a monster premium stock valuation vs. other stocks generally and even the majority of profitable internet-based businesses, while today it sells on par or a discount to other potential investments for your dollar.

Wall Street initially cried a river over the Microsoft search deal, because no upfront money was being paid to Yahoo! However, long-term owners of Yahoo! will collect huge sums of revenues without spending significant new capital in the heated competition with Google search. Basically, Microsoft will pay a majority cut of all ad revenues generated by Yahoo! search and keep up the database, without Yahoo! spending much money to run the operation for 10 years. After that, Yahoo! will still own its large database and owe Microsoft nothing. I don’t see how any rational observer can call this a bad deal? Incidentally, when you collect billions in revenues annually without spending substantial capital to create the sales, nearly the entire sum is kept as PROFITS for shareholders. Profit margin expansion will be nearly exponential in 2010 and 2011, largely as a result of this deal.

In contrast, Google is having to reinvest ever greater sums of money to keep search growing and competitive with Yahoo! and Microsoft. Google’s "free" cash flow as a percent of sales will be well UNDER 20% in 2010, and is around 20% currently. After the Microsoft deal, YHOO will slash search’s capital spending to almost nothing vs. years past. The "free" cash flow percent on revenues (profits available for shareholders to invest in other businesses or pay as a dividend without hurting future earnings) will be well ABOVE 20% next year, to as high as 25% of each dollar in sales in 2011-2012 as Yahoo! sells itself simply as the greatest content provider on the global internet stage.

After factoring in the effects of a better economy in 2010, the Microsoft deal that will add considerable “free” cash flow, and expected rising rates of inflation (which will be a boon to low cost, internet content/advertising companies like YHOO), Yahoo! should see a “free” cash flow number of better than 6.5%, if not 7.5%, next year based on the $17 stock quote, and well above 9% in 2011-2012.

What's not to like about this super-huge profit margin company with a pristine balance sheet, and the leading brand name in content on the internet???

The company could buy back 25% of the float of outstanding shares with the $5 billion in actual cash on hand, thereby increasing each existing shareholder's interest by 25% near the bottom of the economic cycle, and reported sales per share, cash flow per share and earnings per share by another 23%-25% (after deducting the 1% yield on money in the cash position that will disappear from the income statement on $5 billion, but accounting for the incredible accretive action of this move)!!!

Yes, YAHOO has plenty of options to increase investor worth with nearly 50 cents on each dollar of stock price in liquid investments that can easily be reshuffled.

The volume accumulation trend on Wall Street of Yahoo’s stock during the last month, after the supposedly bad deal with Microsoft highlighted clear buying by institutions and large brokerages in preparation for a SIGNIFICANT upmove. I have been screaming buy to everyone that will listen since the deal with Softie was announced, and made Yahoo! my single largest position when it traded closer to $14 per share a few weeks ago.

The brokerage upgrades the past week are one catalyst to reverse Yahoo! into a solidly higher price trend. Getting rid of turnaround artist Carl Ichan is another positive going forward (he has been selling shares at the low price the last few weeks after buying near the peak in the upper-$20s last year), as is the Alibaba deal to raise MORE cash and lock-in some gains from its significant Asia internet holdings.

I expect a large stock buyback announcement any day now, with all the cash sitting on the balance sheet earning 1% annually, that could be reinvested in the growing content/ad business at “free” cash flow yields of closer to 7%. Buying back shares under $20 each, would be a great long-term move by management.

This new-age media conglomerate should trade well above $30 a share next year given a more rational appraisal of the company’s terrific long-term growth prospects and the potential moves that could add real value to shareholder worth from the $5 to $9 billion in cash-like capital yet to be invested