Yahoo! Inc. (YHOO): This Underdog Could Deliver Double-Digit Gains for Traders Who Buy Now

When you think about Internet search engines, I suspect that the first company that comes to mind is Google (NASDAQ: GOOG). I know that’s my first thought, as the Google website is even set as my personal homepage. Yet when it comes to recent traffic metrics, as well as share price performance over the past 12 months, Yahoo! Inc. (NASDAQ:YHOO) is beating up on its biggest rival.

On the traffic front, we got news from industry tracking group comScore showing that in terms of the number of unique monthly visitors in July, Yahoo! Inc. (NASDAQ:YHOO) actually bested Google for the first time since May 2011.

According to the comScore traffic data, Yahoo! Inc. (NASDAQ:YHOO) received 196.6 million monthly unique visitors. That number beat Google’s 192.3 million in July. Moreover, Yahoo! Inc. (NASDAQ:YHOO)’s number didn’t include unique visitors from the recently acquired Tumblr blogging site, which had 38.4 million unique visitors in July.

The traffic data was a surprise to many social media watchers, including Ed Barton, director of digital media at technology consulting firm Strategy Analytics. Commenting in an interview with CNBC, Barton said the Yahoo! Inc. (NASDAQ:YHOO) numbers were “incredible” and a “pretty strong endorsement” for Yahoo CEO Marissa Mayer.

marissa mayer waving flag

“No online media outlet would have come close to predicting this, and if they had, you would have said they were insane,” remarked Barton. As for Yahoo’s stock, he said, “This will probably have a positive impact on the share price and if Yahoo keeps this up, it has a chance of becoming relevant again.”

Indeed, there’s nothing irrelevant about the performance of Yahoo! Inc. (NASDAQ:YHOO) shares over the past year. In fact, we see it trouncing Google, with YHOO up about 77% during the past 52 weeks versus GOOG’s 23% gain.

While some of this relative outperformance has to do with Google shares being somewhat tired after a stellar five-year run, there is no doubt that the optimism about Yahoo’s turnaround under the leadership of Mayer has caused the smart money to bet on YHOO.

Mayer has made a lot of headlines with some of her high-profile changes, including the aforementioned Tumblr acquisition, the ban on Yahoo employees working remotely from home, and the company’s policy of extended maternity leave benefits.

More importantly, however, is Mayer’s bottom-line business acumen. She talked about that in a recent Vogue interview. Mayer stated that Yahoo has plans to prevail as the transition from traditional desktop PCs to mobile devices such as tablets and smartphones continues its inevitable march.

In the Vogue interview, Mayer said that mobile customers want, “Email, maps, weather, news, stock quotes, share photos, group communication, sports scores, games… it sounds like a list of what Yahoo does.”

Now, from a technical perspective, YHOO shares saw a 3% bounce in early Thursday trade following the comScore news. The stock now sits comfortably above its 50-day moving average, while trading just below its 52-week high.

YHOO Chart

I suspect that if Yahoo’s traffic metrics continue to improve, and if it can show that it was able to monetize that traffic in the coming quarter when it reports earnings in October, then traders are looking at a potential big winner at current price levels.

Recommended Trade Setup:

– Buy YHOO at the market price
– Set stop-loss at $25.66, approximately 8% below the current price
– Set initial price target at $32.08 for a potential 15% gain in two months

$1,000 Per Month Trading System

You could collect $1,000 or more per month without buying a single stock. Click here to learn how…

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

Subscribe

Enter your email:

Delivered by FeedBurner

X

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 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!