Google Looks Good Compared to Yahoo

Article Submitted by: Mass Market Tech
Stocks - Options - Mutual Funds


Marketwatch had a good article comparing the stock prices and ratios of Google versus Yahoo. Their conclusion: Google is undervalued. It's hard to argue with this conclusion. In general, Google appears undervalued compared to many of its tech peers. I haven't bought, but I might.

 

Submitted: Oct 9, 2007    Views: 764    Comments: 3    Likes: 36   


Marketwatch had a good article comparing the stock prices and ratios of Google versus Yahoo.  Their conclusion: Google is undervalued.  It's hard to argue with this conclusion.  In general, Google appears undervalued compared to many of its tech peers.

Google shares are trading at 30 times estimated earnings according to consensus forecasts from Thomson Financial while Yahoo is trading at 50 times earnings.  Google also trades at a 20% discount to the average PE for the Internet sector versus Yahoo's 30% premium.

Google is a huge company that needs enormous growth to maintain its PEs but is any company is capable of doing it, Google is.  They certainly seem to be outmanuevering Yahoo. 

A really bold investor could short Yahoo and go long on Google.  This provides some sector insurance while playing the disparity in the two stocks.

 




Related Articles:



36

Email this story Email to someone | Print Story Print Content | Add to reading list

Comments Received:

Trevor Williams

Google is dismembering Yahoo! Any technology or internet company that says that they are not competing with Google is in for a rude awakening.

Posted: Oct 9, 2007

ZiggiZ
(not registered user)

Yahoo! is the new AOL, and the stock is dramatically overvalued as you have suggested. Google has made a believer out of me too.

Posted: Oct 9, 2007

Dave Weatherspoon

On a strict valuation basis, you are absolutely correct, but Google is a behemoth as faces slower growth as a result of the law of large numbers.

http://www.nytimes.com/2007/10/13/technology/13google.html?pagewanted=2&hp&adxnnl=1&adxnnlx=1192295518-CVO5EKBDwClSy1lquBPVzQ

Google may go higher in the near term, but when, not if, growth slows, it will fall to earth.

I am not in an way, shape or form advocating Yahoo! as a buy. They've destroyed that one already.

Posted: Oct 13, 2007



Add Your Comments:

Your Name:

Spam protection control:


© Copyright 2008 Mass Market Tech All rights reserved. Mass Market Tech has granted BestCashCow.com, LLC non-exclusive rights to display this work on Bestcashcow.com.

Financial products of all nature bear inherent risks and this website is not a financial advisory service; it is a forum for users to share and to compare notes and observations on financial publications. The website provides, free of charge, the technical and logistical apparatus and the medium for users to share and to publish financial information and to comment on publications. As such, the website’s operator can not and does not take responsibility for information, observations or opinions of any sort or nature provided by third parties with whom it is not affiliated who use the website to publish, to comment or as a means of solicitation. Users are specifically warned against following any advice related to specific instruments, including, but not limited to, equity securities, that may be provided by other users directly on this site or on web pages to which other users have provided links on this site. BestCashCow.com can not and does not check or verify the qualifications and credentials of users who publish or comment on this site or on linked pages. Users should seek personalized advice from qualified professionals regarding all personal financial issues and evaluate the risks and applicability to their own circumstances of each financial product discussed regardless of who the publisher is or purports to be. Should you, through your use of this site, identify an individual or organization purporting to offer personalized advice, you bear all responsibility to ensure that the individual or organization has the qualifications that they may represent on the website, and that their advice is appropriate for your circumstances. On certain webpages, BestCashCow.com provides information related to rates on US-based savings accounts, CDs, short-term government bonds, and other US cash equivalent securities, also free of charge to internet users for their independent use. The accuracy of this information is not guaranteed, and the information, like all other information on this website, should not be construed to provide investment advice, nor to endorse a financial product of any sort.

© 2007 BestCashCow.com, LLC. All Rights Reserved. Terms under which this service is provided to you. Privacy Policy.