Yahoo stock has a firm foothold in the stock market, built on its history as one of the first search engines. If you are thinking about adding Yahoo or any other stock to your investment portfolio, start by educating yourself1 and developing a plan. Take some time to consider a company’s essentials. As with any stock that interests you, begin by reading up on the company profile and the performance of top management, along with studying the financials.
The Yahoo Profile — Pros and Cons
Clearly, Yahoo’s former place in the search space has long been overcome by Google. Today, when someone wants information, it is not uncommon to hear “just Google it.”
There is, however, more to the story. Consider that in January 2015, Google was reportedly losing search market share, while Yahoo’s share has grown.2 How should you interpret such a seemingly positive trend? The answer is: put it into context.
According to many analysts, the positive growth in search share is the recent decision by Mozilla to use Yahoo as Firefox’s default search engine in the U.S.
Much-discussed Yahoo CEO Marissa Mayer has worked to give the company a facelift, with new goals and new priorities, like gaining in mobile and ad revenue. Recent moves indicate she intends to grow media presence for Yahoo,2 with market rumors of a potential interest in acquiring CNN from Time Warner Cable, Inc.2
Many of Mayer’s moves have been criticized, but Yahoo made one very important investment that now accounts for the majority of their current market value – their stake in Alibaba Group Holding Ltd. (NYSE: BABA) now worth $40 billion.2 The Chinese search giant has many supporters in the research analyst community, and many analysts view Yahoo as a derivative play on BABA. Note the recent spinoff announcement.
Making a Choice
Yahoo presents a complex picture to possible investors looking to make wise choices and build their financial profile. If you are new to the market, take steps first to educate yourself on its workings, and next, on each stock you are considering.
Take advantage of a practical online educational tool. A site like Drive Wealth Education offers guidance in how to develop an investment plan and learn about evaluating stocks. You can practice your new skills without risk by creating a free practice account for virtual investing, before you take the plunge.
Once you have a picture of the pros and cons for a given company, add in your personal financial profile and future financial goals. What is your budget for investing? How much can you safely risk on a stock? Think about whether you want to invest for the long-term or for a short-term result. Is the stock you are considering one that is likely to perform over the long haul, or is its current strength more suited to your short-term goals?
Arm yourself with knowledge and enlist a strong ally in your investment planning. Contact us today for help from Drive Wealth Education.
