Is Yahoo! Inc. (YHOO) Still a Buy?

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Yahoo! Inc. (NASDAQ:YHOO) is currently trading at a 18.91 forward price-to-earnings ratio, higher than Google Inc (NASDAQ:GOOG)’s 16.82 forward price-to-earnings ratio and Baidu.com, Inc. (ADR) (NASDAQ:BIDU)’s 17.7 forward price-to-earnings ratio. If you are considering adding Yahoo! to your portfolio, you must rely on its product strategy to pay off. The dynamics are good, but the company will be forced to make additional investments to make the pieces of the puzzle fit together. This investment will affect its bottom line in the near term.

Bottom line

Yahoo! Inc. (NASDAQ:YHOO)’s  rise has made its stock a little pricey, but one has to pay for growth momentum. The company has a clear strategy and a good potential. There has not been a single significant pullback so far during the upward movement; once one occurs, Yahoo! will be a strong buy. Despite the earnings miss, Google Inc (NASDAQ:GOOG) also looks good. The company is dominating the search market, and the bite it has received from mobile is most likely only temporary. As for Baidu.com, Inc. (ADR) (NASDAQ:BIDU), I would like to see its quarterly report to assess its mobile strategy, as this will be the key to determining its prospects.

Vladimir Zernov has no position in any stocks mentioned. The Motley Fool recommends Baidu and Google. The Motley Fool owns shares of Baidu and Google.

The article Is Yahoo! Still a Buy? originally appeared on Fool.com.

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