In a report published Friday, January 23, Tigress Financial Partners reiterated its Buy rating on Yahoo! Inc. YHOO, arguing that the stock is highly undervalued.
Importance Of Excess Cash Per Share Metric
According to Chief Investment Officer Ivan Feinseth, the company’s “Asian assets – a 15 percent stake in Alibaba and a 36 percent stake in Yahoo Japan – are worth a significant portion of the share price and give YHOO a 99th percentile ranking in our 2,200 company coverage universe in the Excess Cash per Share metric.”
A strong cash position, he said, “will provide support for the shares as the company’s monetization strategies take hold.”
Another Importance
Feinseth also highlights the importance of Tumblr, Flickr and mobile apps, three segments in which Tigress Financial sees plenty of growth potential.
“Yahoo’s Weather App is a best-in-breed app that just began showing display ads. Overall, Yahoo’s management claims to have over 1 billion monthly active users across their portfolio, so we believe there are a large amount of users that have yet to be monetized," he added.
Acquisitions Cannot Be Overlooked
Additionally, the recent acquisition of BrightRoll should add value by allowing the company “to leverage more video advertisement content on its various content platforms." This could, in turn, increase its price per ad, which has been under pressure over the past few quarters.
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