Yahoo's Recent Pullback Offers Investors A Great Entry Point [View article]
The conservative upside return of 4% is just in Yahoo's 24% stake in Alibaba. Yahoo's core company has a lot of room to grow, however I think it is too early to pinpoint exactly how that will happen.
Changing a company is not easy. It is very difficult to come in and address all the problems and make improvements right from day one. You need to first address the source of the problem, which is exactly what has been done. Very few young engineers enter the workforce with a strong desire to work at Yahoo. As a result, the highly touted "A+" college graduates are going to companies like Google and Facebook, leaving Yahoo with the B's, C+'s, etc. As I stated in my investment thesis, Yahoo is committed to improve the talent of its employees. This will increase the quality of Yahoo's products because Yahoo's employees are the driving force behind the company's product development. With improved product offerings, more users will use Yahoo products. As Yahoo's user base expands, advertiser demand will increase, growing revenue and earnings.
Once you get the right team assembled, you can start addressing some of the other problems facing the company. The first, and most important problem that is being solved, is that all the employees are leaving and no one new wants to come work at Yahoo. Mayer is addressing this first, because it is the most important and most vital to the long-term success of the company. Once the right team is in place, it is much easier to make the necessary changes for long-term success. Yahoo is in no way the perfect company, and probably does not have the most talented employees compared to some of its peers, however it has built momentum and I believe it will continue moving in the right direction.
Yahoo's Recent Pullback Offers Investors A Great Entry Point [View article]
In my opinion, the increase in the last 9 months has been mostly due to speculation that Yahoo will start to turn the corner due to all of the changes being made within the company. If these changes improve the bottom line, I think the run will continue. If not, we might start to see Yahoo return to previous patterns of trading sideways for a decade. In my opinion, I definitely still think this is still a great time to get in!
Yahoo's Recent Pullback Offers Investors A Great Entry Point [View article]
It had a significant drop when earnings came out, which is when I first wrote this. The submission process took a few days... any ideas on a new title?
I am having trouble understanding the DCF, you have both green and red numbers that are in parenthesis. From what I understand, you are projecting Yahoo's FCF to consistently decrease by 16% for the next 20 years. Could you go into more detail on your calculations of $10.11 for the fair value per share?
I agree 100% that the leader of a business is its most important asset. You can value a company based on its past or expected future financial performance, however the expected future cash flows can change at any time. The one who is most influential to change those is the person in charge, and the employees he or she leads.
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Yahoo's Recent Pullback Offers Investors A Great Entry Point [View article]
Yahoo's Recent Pullback Offers Investors A Great Entry Point [View article]
Yahoo's Recent Pullback Offers Investors A Great Entry Point [View article]
Yahoo's Recent Pullback Offers Investors A Great Entry Point [View article]
Changing a company is not easy. It is very difficult to come in and address all the problems and make improvements right from day one. You need to first address the source of the problem, which is exactly what has been done. Very few young engineers enter the workforce with a strong desire to work at Yahoo. As a result, the highly touted "A+" college graduates are going to companies like Google and Facebook, leaving Yahoo with the B's, C+'s, etc. As I stated in my investment thesis, Yahoo is committed to improve the talent of its employees. This will increase the quality of Yahoo's products because Yahoo's employees are the driving force behind the company's product development. With improved product offerings, more users will use Yahoo products. As Yahoo's user base expands, advertiser demand will increase, growing revenue and earnings.
Once you get the right team assembled, you can start addressing some of the other problems facing the company. The first, and most important problem that is being solved, is that all the employees are leaving and no one new wants to come work at Yahoo. Mayer is addressing this first, because it is the most important and most vital to the long-term success of the company. Once the right team is in place, it is much easier to make the necessary changes for long-term success. Yahoo is in no way the perfect company, and probably does not have the most talented employees compared to some of its peers, however it has built momentum and I believe it will continue moving in the right direction.
Yahoo's Recent Pullback Offers Investors A Great Entry Point [View article]
Yahoo's Recent Pullback Offers Investors A Great Entry Point [View article]
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6 Reasons Why I'm Bearish On Yahoo [View article]
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6 Reasons Why I'm Bearish On Yahoo [View article]
I am having trouble understanding the DCF, you have both green and red numbers that are in parenthesis. From what I understand, you are projecting Yahoo's FCF to consistently decrease by 16% for the next 20 years. Could you go into more detail on your calculations of $10.11 for the fair value per share?
Thanks
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