4 Top Internet Stock Picks: Tripadvisor Inc (TRIP), eBay Inc (EBAY)

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The one company that appears on both of our lists is eBay.  In case you didn’t already know, eBay is a company that connects buyers and sells through the world’s largest online marketplace.  And eBay owns PayPal, which enables customers and merchants to make and receive payments quickly and securely online.  As other analysts have noted, that is a nice one two combination.  So what is not to like about this company?  After all, compared to companies like Amazon, eBay looks like a bargain.  Furthermore, eBay has demonstrated the ability to deliver results in a rough economy, PayPal is streamlining product development, eBay has significantly improved the user experience, and eBay is at the forefront of the mobile movement that is revolutionizing commerce worldwide.  On the downside, shares of eBay are currently trading at a price that is only moderately attractive.  On balance, eBay is a great company that only has one formidable competitor in the e-commerce space: Amazon.


Tencent provides a comprehensive range of Internet and wireless value-added services.  Through its various online platforms, including Instant Messaging QQ, web portal QQ.com, the QQ Game Platform under Tencent Games, multi-media social networking service Qzone and wireless portal, Tencent services the largest online community in China.  The company fulfills the user’s needs for communication, information, entertainment and e-commerce.  Tencent has four main streams of revenues: Internet value-added services (72% of revenues), mobile and telecommunications value-added services (8% of revenues), online advertising (9% of revenues) and e-commerce (10% of revenues).  Although finding information on this company is challenging, from what I can discern owning this company is like owning China’s version of Facebook, eBay (including PayPal), “Netflix for gamers,” Google, and Amazon – or at least elements of those companies.  Overall, the stock has been on a terror over the past few years and although growth expectations are high, this company continues to deliver.  With a market cap of US$38 billion, the company is the third largest internet company in the world behind Google and Amazon.

My Foolish Take

All of these companies are growing at rapid rates, have solid business models, and have the potential to deliver solid returns in spite of their underlying valuations.  A critical consideration when purchasing shares in internet companies is whether or not you are trading or investing.  Another closely related, very important consideration is timing.

The article 4 Top Internet Stock Picks originally appeared on Fool.com and is written by Ryan Peckyno.

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