Internet Stock Sentiment Increases Slightly

SUMMARY: Piqqem Sentiment for Internet Shares has in aggregate increased slightly over the past three months. Rising 10 basis points from 2.11 to 2.21. Overstock (OSTK) and Netflix (NFLX) show the strongest sentiment gains while Google (GOOG) showing moderate declines. However, overall sentiment remains strongest for Amazon (AMZN) and Google with Yahoo (YHOO) sentiment remaining the weakest.

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Piqqem Sentiment is measured on a scale of 0-to-4 with 0 as the lowest rating and 4 as the highest rating. Internet shares have a relatively high degree of Piqqem user participation and therefore a higher degree of confidence. The Piqqem Sentiment average for the five stocks covered in this report rose 10 basis points over three months from 2.11 to 2.21, or from nominally neutral to nominally bullish. Amazon (AMZN) sentiment rose by 6 basis points. The most likely reason behind this nominal increase was relatively strong operating margins and sales, although share prices are high relative to other Internet players.

Google (GOOG) actually showed a decline of 15 basis points during the period. This is likely due to Google’s slowing growth and the overall sentiment drag on advertising- related businesses. Over the past three months, sentiment on Overstock (OSTK) has risen by 33 basis points. The likely reason for this is assumption that consumers shopping online will go to discount retailers. Overstock is also somewhat volatile due to its comparatively small market cap.

Netflix (NFLX) sentiment has increased by 17 basis points. The most likely driver for the increase was building traction for its streaming model and the secular benefits to an affordable entertainment service in a down economy. Yahoo (YHOO) sentiment rose by 14 basis points. The most likely reason for the increase was the arrival of Carol Bartz as Yahoo CEO and speculation that the company would sell its search business to Microsoft.

Conclusion: According to Piqqem Sentiment data, Amazon and Google remain the Internet shares most likely to increase in the near-term. Netflix and Overstock have the fastest rising sentiment numbers and are therefore stocks to watch should sentiment continue to rise in anticipation of an increase in their share prices. Yahoo sentiment has gone from sliding negative to moving towards positive, which could be a key turning point.

(Note: The next Internet Stocks report will also cover eBay (EBAY) and additional related companies).