YHOO plug:
The INVESTools Advisory, November 9-13, 1998
1. Rocketing Yahoo A 'Buy' Despite Ski-high Price Tag (YHOO)
Friday, November 13, 1998
"There is great controversy in investment circles concerning
the price of this stock," says growth stock investor Carlton
Lutts about Yahoo (YHOO). This may be a grand
understatement. With a P/E near 400, analysts, investors and
pundits say the Internet directory and media service is
extremely overpriced. Lutts disagrees, arguing that Yahoo is
"an entirely new, worldwide media company" and its position
as an Internet leader is extremely valuable.
Yahoo's free service receives millions of visitors daily,
and Lutts notes that Yahoo's revenues mainly come from
short-term contracts to provide banner advertisements. These
revenues are surging, up nearly 200% from a year ago.
September quarter revenues were $53.6 million, up from $41.2
million and $30.2 million in the previous two quarters.
Earnings are also growing; Yahoo reported a $0.15 EPS for
this quarter vs. $0.04 last year.
"If ever a stock had a chance to collapse, Yahoo did in the
July-September market weakness," Lutts says. He points out
that Yahoo corrected briefly from $100 to $60 in early
September but closed on November 11 at $165.
For more on Carlton Lutts' recommendation see "Cabot's New
Stocks," October 30, 1998, The Cabot Market Letter. Growth
stock investor Carlton Lutts uses fundamental analysis and
looks for upward market trends and positive stock momentum
to identify tomorrow's superstars before their share prices
soar.
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