Why Jim Cramer's Chart Guy Loves Alibaba, Not Yahoo
Bob Lang loves Alibaba Group Holding Ltd (NYSE: BABA). He's long on calls and short on put spreads.
“I’m all over the place on [Alibaba],” he said.
Lang is a private trader in equity options markets at his company, Aztec Capital LLC, an options mentor at Explosive Options and one of Jim Cramer’s go-to technical experts on "Mad Money."
Lang recently joined Benzinga’s #PreMarket Prep broadcast to talk about Alibaba’s earnings, how it’s similar to Google Inc (NASDAQ: GOOG) and why it’s better to invest in than Yahoo! Inc. (NASDAQ: YHOO).
“Here’s the thing: This is the first earnings report this company has come out with, and also this is the first time as a public company they’re going to be able to start having some sell through for the holidays,” Lang started.
He explained that Alibaba and the investment community are in a spot similar to where Google was right before its first earnings report after going public in 2004.
“Everybody knows what their margins are like, what kind of sales they do and so forth,” Lang said. “I would highly think that they’re not going to disappoint the street here.”
Lang does think that Alibaba is a little extended. While shares are up 10 to 12 percent over the last couple of weeks, he said that a lot of other stocks are, too. He said the stock would probably stop around the $103 level.
But Lang is not a fan of Yahoo.
— Bob Lang (@aztecs99) November 3, 2014
“If you’re buying it for the [Alibaba] proxy, why not just by BABA?” he asked.
Lang said that Yahoo is getting crushed “left, right and center” by Google. He said that the numbers for Microsoft’s search component, Bing, might even be better than Yahoo’s own numbers.
“Yahoo still hasn’t recovered from the mid-’90s when they went to the free model,” he said. “I think they have a really hard time monetizing what they’re doing.”
He thinks that investors looking to buy shares of Yahoo for is Alibaba stake should just by Alibaba, itself.
Check out his full interview here:
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