Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Are These 3 Stocks as Sickly as They Look?: Yandex NV (YNDX) and More

Page 1 of 2

The markets were enjoying an up day yesterday with the Dow Jones Industrial Average rising 54 points to hit a five-year high of 14,035, buoyed as it was by upbeat news of the expansion of General Electric Company (NYSE:GE)‘s health-care division into the Japanese market. The following three companies, however, looked in need of a doctor, as they were among the more notable decliners yesterday leading the way sharply lower.


Company % Change
Digital Generation (NASDAQ:DGIT) (28.2%)
Yandex NV (NASDAQ:YNDX) (10.1%)
Sandstorm Gold (7.7%)

Now don’t go running over the cliff with them like a bunch of lemmings: it could just be a temporary situation. Let’s first see whether they had good reason to fall, as panic-fueled routs can sometimes lead to excellent buying opportunities.

On the precipice
Acquisitions have been what separated Digital Generation from its rivals. Trying to add online advertising to a portfolio of traditional television accounts, the advertising middleman embarked on a number of acquisitions over the past few years that bulked up its digital revenues. Television accounted for 92% of DG’s revenues in 2010, and now digital represents more than one-third of them today.

The biggest acquisition it tried to engineer, however, was itself. After hiring Goldman Sachs Group, Inc. (NYSE:GS) to conduct a “strategic review” and approaching some 45 potential buyers over the course of a year, no one was interested. After noting that it failed to produce a buyer for itself, DG said it will remain an independent company, which led to the sell-off in the stock yesterday. That, and the fact that it also recorded a fourth-quarter loss, as it took an $11.4 million charge on goodwill related to the acquisitions it made.

I’ve pointed out before that the industry is poised to undergo a change on how ad rates are set online because they’re based on “impressions,” an imprecise term of art that AdWeek says is mostly less than a second. DG touts that its online segment surpassed more than 1 trillion impressions last year, but revenues still fell 4%.

With online advertising expected to grow to $8 billion by 2016, there is a market for its services, but how it ultimately translates that into cash for itself could become more of a challenge.

Maybe it doesn’t have the same cachet as being the “Google of China,” but Yandex, the “Google of Russia,” has also been a growth stock over the past year, rising 57% from its low point last June — until yesterday’s sell-off, that is, over fears that the market has matured and it won’t see the same  phenomenal gains it enjoyed in the past.

The Russian search engine, which is the largest in the country with a 60% share of the market, reported revenues came in a 2.69 rubles, well short of the 2.96 rubles analysts had anticipated, while also saying it expected sales to grow just 28% to 32% in 2013. While Wall Street was already expecting growth to slow, Yandex’s cautious outlook was below even their muted expectations of a 33% increase.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!