Marissa Mayer, CEO of Yahoo! Inc. (YHOO), unveiled the new Yahoo company logo recently, but not too many people seem to care. The logo is just part of a makeover the company has been undergoing since the company hired ex Google Inc (GOOG) executive Marissa Mayer about a year ago. Yahoo's new CEO is off to a good start, as Yahoo has overtaken Google as the most visited website in the United States, based on unique visitors. After a big move higher in the stock price over the last year, is Yahoo a buy, sell or hold?
Yahoo's stock has climbed about 80% in the last year, but much of the gain came from its 24% stake in China's Alibaba Holdings. Yahoo made a $1 billion dollar investment in Alibaba in 2005. The company sold half of its position for $7.1 billion in 2012. Under the terms of the agreement, Yahoo will sell half of its shares if an IPO takes place before the end of 2015. Alibaba has the option to choose whether to buy the shares, or have Yahoo sell them in the offering. Afterwards, Yahoo will be prohibited from selling shares for one year. Alibaba's revenue increased by 75% in the first quarter of 2013, and earnings increased 189% year over year. Alibaba has been a great investment for the company, and still may bring more upside to the stock going forward. Yahoo's stock is up about 40% in 2013, and near long-term resistance, according to the Stock Traders Daily live trading report.
Yahoo is not just betting on China, the company is targeting a 77% increase in profits over the next 6 years with its expansion of e-commerce, smartphone and tablet computer services. Japan's smartphone market is estimated to almost triple from 2012 to 2017, and mobile devices are expected to surpass PC's as the method of accessing Yahoo Japan's services.
Yahoo is focusing on mobile expansion here in the U.S too. The company is releasing a new mobile look across many of its products in the U.S., including Mail, Finance, Homepage, Search, Messenger and News. The mobile web experience has been updated to be more consistent with Yahoo's mobile apps. Yahoo wants deliver ad opportunities that are seamless, and stretch across desktop, tablet and mobile.
Marissa Mayer has the company going in the right direction. Recent acquisitions like Tumblr and IQ Engines suggest that the company plans to reposition itself as a leader in technology. Stock Traders Daily is neutral on the stock long term. The stock is up over 26% in the last 6 months, and close to testing long-term resistance. Treat resistance as inflection, because if the stock fails to break above long-term resistance and hold, it could pullback all the way down to support.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Business relationship disclosure: By Neal Rau for Stock Traders Daily and neither receives compensation from the publicly traded companies listed her for writing this article.