Angie’s List Inc (ANGI), Yelp Inc (YELP): Three Things That Can Go Wrong in 2013

3. Winners can be losers
There have been a lot of surprising winners this year, and dozens of unlikely companies that have more than doubled so far in 2013. Angie’s List Inc (NASDAQ:ANGI) and Yelp Inc (NYSE:YELP) are seeing their share prices worth twice as much, even though Facebook Inc (NASDAQ:FB) rolled out Graph Search earlier this year.

What’s the big deal?

Well, let’s assess the models. Angie’s List Inc (NASDAQ:ANGI) gets people to pay a premium for vetted referrals. Paying subscribers can get leads for everything from a new dentist to a roofer. Yelp Inc (NYSE:YELP) has grown in popularity by offering restaurant and venue reviews.

Excitement about the prospects of local search — and getting merchants at the local level to pay up for enhanced access at Yelp Inc (NYSE:YELP) and consumers to pay for enhanced research through Angie’s List Inc (NASDAQ:ANGI) — has helped push the financial performances of both companies nicely higher this year.

However, now we have Facebook Inc (NASDAQ:FB) allowing users to look through their existing friends and even their friends of friends for references. A friend of a friend may be a dentist. You distant yet chatty cousin may have had a great experience last year with an affordable roofer. As Facebook Inc (NASDAQ:FB) cashes in on the data that it’s been collecting on more than a billion active users, will the Angie’s List Inc (NASDAQ:ANGI) and Yelp Inc (NYSE:YELP) models hold up?

How about Best Buy Co., Inc. (NYSE:BBY) ? Shares of the troubled consumer-electronics superstore chain have more than doubled this year, too.

Best Buy Co., Inc. (NYSE:BBY) seems to have gotten a smart CEO last year. He’s cutting costs and naturally restoring confidence among investors. However, Best Buy Co., Inc. (NYSE:BBY) is still expected to post double-digit percentage declines in revenue and earnings this year.

In short, some of this year’s biggest winners may actually be some of its more flawed and vulnerable companies.

So much can go wrong in the balance of 2013.

The article 3 Things That Can Go Wrong in 2013 originally appeared on Fool.com is written by Rick Munarriz.

Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Facebook.

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