Why Yahoo! and Micron Technology are Rising

Shares of Yahoo!, Micron Technology, and Facebook are the among the most active tech stocks on Monday.

Jun 30, 2014 at 11:30AM
Longview

The Dow Jones Industrial Average (DJINDICES:^DJI) was just above breakeven as of 11:30 a.m. EDT. As the market moved into the green, a few tech stocks were experiencing significant rallies, including Yahoo! (NASDAQ:YHOO) and Micron Technology (NASDAQ:MU). Facebook (NASDAQ:FB) was seeing notable volume.

Yahoo! rises on analyst upgrade
Yahoo!
 shares rose more than 2.3% in early trading after Piper Jaffray upgraded the Web portal. Piper Jaffray had been neutral on Yahoo!, but raised its rating to overweight in a note to clients released early on Monday. Piper Jaffray believes Yahoo! shares could be worth $43 -- about a 22% premium from current levels.

Piper Jaffray's upgrade is primarily based on its optimistic outlook for Alibaba, the Chinese e-commerce giant. Yahoo! owns 22.6% of Alibaba, about half of which it is required to sell in Alibaba's upcoming IPO. That will generate substantial cash for Yahoo! -- recent estimates put the total at about $10.4 billion. And Piper Jaffray's expects that Alibaba's valuation will rise as its IPO date nears.

Optimism for Alibaba should result in appreciating Yahoo! shares, though what the company actually does with the cash remains to be seen. Yahoo! once owned 40% of Alibaba, but sold about half of its stake in 2012. Most of the cash from that sale was used to repurchase shares -- directly benefiting investors. But Yahoo! has been on an acquisition streak lately and could plow the Alibaba cash back into its core business.

G

Source: Derzsi Elekes Andor via Wikimedia Commons.

Facebook flat amid emotional controversy
Facebook shares were largely unchanged early in the session despite the recent controversy generated by a secret psychological study.

In 2012, Facebook researchers secretly tinkered with the news feeds of some 700,000 users; it adjusted the algorithm so as to showcase a disproportionate number of positive or negative stories, then looked for signs of emotional changes in test subjects. Ultimately, researchers concluded that Facebook stories could sway the user's mood, reinforcing emotions with a contagion-like effect.

Although less than 0.1% of users were impacted by the study, it has generated a degree of backlash, with some observers accusing Facebook of crossing ethical boundaries. There is the question of whether Facebook's researchers violated the principal of informed consent -- per the ethical rules of psychological studies, test subjects need to be aware of their participation.

Ethical questions aside, the controversy generated by the study poses some degree of risk to Facebook. If enough people find fault with Facebook's behavior, they may leave the social network, or at least significantly reduce their engagement. Competitors, which have thus far been unable to gain a foothold, could play on Facebook's willingness to manipulate its users' experience on the site.

For the time being, there is no sign that this story will have a lasting impact on Facebook. Still, investors should be mindful of the potential negative ramification.

Micron jumps on positive note
Micron Technology shares rose nearly 4% after Credit Suisse added the stock to its "Focus List."

Credit Suisse is positive on Micron Technology, and has been for some time. Adding the memory-chip maker to its Focus List, however, may signal an even greater belief in the relative strengths of the company. Credit Suisse has a $50 price target on Micron, suggesting a premium of more than 50% from current levels.

Credit Suisse continues to like the company's diversification efforts and potential for gross-margin expansion. Other analysts and famed investors have also been bullish on the stock. Hedge fund manager David Einhorn, for example, has a large position in the company.

Micron shares have risen more than 125% in the last year. Yet, despite its recent rally, Micron remains relatively cheap on a valuation basis -- trading with a below-market price-to-earnings ratio.

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Apple, Facebook, InvenSense, and Yahoo. The Motley Fool owns shares of Apple, Facebook, InvenSense, and Yahoo. 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