“Years from now, I think students of business will study Yahoo (YHOO) as an example of what not to do. These guys were in the perfect place to OWN the Internet. They had the brand name, the market position and a sky-high stock price. Even I took advantage of the good times when Yahoo was on the rise–locking in a 121% gain for my Blue Chip Growth subscribers. They could have done anything they wanted, but they blew it. Google, the stock I just mentioned, stole Yahoo’s future right out from under it. Then Microsoft offered to buy Yahoo for $31 a share, which was a huge premium to the going price. Yahoo said they wanted $37. Microsoft raised its offer to $33. Yahoo still wanted more. Long story short–Yahoo is now at $11. Stupid, stupid, stupid!”
Things might be improving. I just raised Yahoo to a Hold from a Sell. Yesterday, Yahoo reported earnings of 17 cents a share which beat Wall Street estimates by four cents a share. Let’s see if things continue to improve.
In the biotech space, Gilead (GILD), one of my favorites, just reported blow-out earnings. The company earned 63 cents a share. That’s a 43% increase over last year and six cents more than Street estimates. The market may be disappointed with its 2009 forecast, but that’s probably an excuse to take profits (the stock is up nearly 30% since its October low). Gilead is a very strong buy.