Spring is in the air, and April showers bring more than May flowers with them this year. They also bring earnings season. Exclamatory Internet titan Yahoo!
After the news comes out, we'll have time aplenty to dissect it. But in these few hours before we begin obsessing over Yahoo!'s short-term progress, let's take a moment to review what investors think about it as a long-term investment. Our tool in this endeavor: Motley Fool CAPS, where we poll more than 27,000 investors for their views on more than 4,000 companies, Yahoo! among them. Here's what Fools have to say about the company.
Up or down?
More than 2,000 investors have submitted ratings on the company. Overall, 85% of CAPS investors think the company will outperform the market. And in further illustration that hope springs eternal, 91% of the very best investors -- the CAPS All-Stars -- give Yahoo! the thumbs-up. Regardless, there's enough doubt about the company out there that Yahoo! gets just three out of five possible stars under the CAPS rating system.
Even so, when compared to its peer group on CAPS, Yahoo! ranks pretty high on the totem pole:
|
Internet Information Providers |
CAPS Rating |
|---|---|
|
The Knot |
**** |
|
Yahoo! |
*** |
|
CNET |
*** |
|
Baidu.com |
** |
|
Google |
* |
|
Travelzoo.com |
* |
|
Bankrate |
* |
Wall Street vs. Main Street
When you ask Wall Street analysts, the investors who supposedly know the most about investing, they favor Yahoo! by even greater margins. Out of 37 analysts polled, more than half think it will outperform the market. Only one rates the stock a sell. That's a 20-to-1 margin, folks.
Yet if you examine the stock's performance over the past 52 weeks, you'll see that it has underperformed the market by more than 11 percentage points.
So with Wall Street so bullish, why is Yahoo! getting a bum rap on CAPS?
Bull pitch
The top bull pitch on CAPS argues that Yahoo!'s a long-term winner by virtue of generating "gobs of [free cash flow] each and every quarter/year." What's more, the stock looks cheap, being "60% off its high and about 10% off its low."
Bear pitch
Bears respond that Yahoo! deserves to trade lower today. The top-rated bearish pitch highlights problems with Yahoo's website -- an observation echoed by several other CAPS raters. It's also worth pointing out that "cheap" is a relative term. At 61 times trailing earnings, Yahoo! actually appears more expensive than Google, which sits at 47 times earnings.
Who said that?
To learn the identities of the wise Fools who penned these words, and to explore the plethora of additional financial data we've put together on the company, just click here.
Fool contributor Rich Smith does not own shares of any company named above. You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked 220th out of nearly 27,000 raters. Yahoo! is a Stock Advisor pick. The Fool has a disclosure policy.
