Here's Why Shares of Yahoo! and Zillow Are Moving Higher Today

With tech stocks rising, both Zillow and Yahoo! are outperforming. Here's what investors need to know.

Apr 16, 2014 at 2:55PM

On Wednesday, tech investors enjoyed a brief reprieve from recent selling as the Nasdaq Composite Index (NASDAQINDEX:^IXIC) rose nearly a full percentage point in early trading. It's worth noting, however, that two outliers are standing out from the pack. Among today's biggest winners are Internet extraordinaire Yahoo! (NASDAQ:YHOO) and online real estate specialist Zillow (NASDAQ:ZG).

Yahoo-baba is winning big
Shares of Yahoo!, for one, are currently up more than 6% following yesterday's after-the-bell release of encouraging first-quarter results. Yahoo! reported GAAP revenue, which fell 1% year over year to $1.133 billion, which translated to 17% lower GAAP net earnings of $0.35 per diluted share.

Yahoo

Yahoo! headquarters. Source: Wikimedia Commons.

On an adjusted basis, however, Yahoo!'s net earnings remained flat from last year at $0.38 per share. Analysts, on average, were looking for adjusted earnings of $0.37 per share on sales of just $1.08 billion. In short, while the results may not seem overwhelmingly positive at first, investors are rightly rejoicing as Yahoo! finally exceeded expectations on the revenue front for the first time in over a year -- a performance largely driven by search and display revenue, which increased 5% and 2%, respectively.

If that wasn't enough, Yahoo!'s supplementary documents showed fourth-quarter sales for Alibaba Group rose roughly 66% to $3.1 billion. Alibaba's net income also jumped 110% to $1.4 billion. That's a great thing considering Yahoo! has already pledged to sell roughly half of its massive 24% stake in Alibaba during the Chinese online commerce giant's impending U.S. IPO.

Zillow secures a valuable employee
Meanwhile, Zillow's nearly 4% rise early on is harder to peg, with no press releases or notable news today. What's more, while Zillow has settled up around 3% today as of this writing, shares have risen more than 7% so far this week. So what gives? 

I think this week's gains can be largely chalked up to a King County Superior Court decision on Monday evening, which denied a motion by Zillow competitor Move (NASDAQ:MOVE) to block Zillow's employment of Errol Samuelson.

Zillow

Errol Samuelson has joined Zillow. Source: Move.

Samuelson, for his part, formerly worked as president of Move subsidiary realtor.com until March, when he unexpectedly defected to Zillow. Zillow promptly appointed him the role of chief industry development officer, where he'll tackle the tough job of brokering partnerships with other parties, which are -- by many measures -- Zillow's competitors. 

Shortly afterward, and keeping in mind Samuelson never signed a non-compete agreement at his former employer, Move brought the lawsuit against Zillow claiming Samuelson was privy to sensitive information, which should not be shared. Further underscoring Samuelson's apparent importance was the National Association of Realtors, which also joined Move's lawsuit last month.

Unfortunately for the folks at Move and NAB, the court ruled they simply hadn't proven Samuelson would disclose trade secrets to Zillow or that he misappropriated them when he left.

Worse yet, only two weeks after Samuelson's new appointment, Zillow announced it had hired a new VP of industry development in Curt Beardsley, whom Move had only just tapped to serve as Samuelson's replacement. To Zillow's credit, Beardsley wrote in his resignation letter that he had "lost faith in Move," and reached out himself to Zillow to see if there was a position available for him.

All things considered, if the sentiment of these two former senior Move employees is any indication, Zillow's leadership position in the online real estate market appears as solid as ever.

Three stocks poised to be multibaggers
But Yahoo! and Zillow certainly aren't the only promising stocks out there for patient long-term investors.

The one sure way to get wealthy is to invest in a groundbreaking company that goes on to dominate a multibillion-dollar industry. Our analysts have found multibagger stocks like Netflix time and again. And now they think they've done it again with three stock picks that they believe could generate the same type of phenomenal returns. They've revealed these picks in a new free report that you can download instantly by clicking here now.

Steve Symington has no position in any stocks mentioned. The Motley Fool recommends Yahoo! It recommends and owns shares of Zillow. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers