Cramer: "Downgrader's Record Favors Yahoo!"
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Cramer: "Downgrader's Record Favors Yahoo!"
"Downgrader's Record Favors Yahoo!"
By James J. Cramer
RealMoney.com Columnist
2/24/2005 10:04 AM EST
The record favors Yahoo! (YHOO:Nasdaq - commentary - research) in its ongoing battle with RBC's Jordan Rohan, the analyst who downgraded the stock today. I don't want to put too much emphasis on it, in part because I have to live in this town and work with people, but history is a dynamite taskmaster.
On March 1, 2002, Rohan upgraded Yahoo! at $7.46. He then downgraded it on Oct. 1, 2002, at $4.95. Not so hot.
Rohan then upgraded Yahoo! to outperform on June 16, 2003, at $14.80. Took guts to do that given the downgrade. I remember kidding him about it on television, which was tough but deserved medicine. He then downgraded it to neutral on April 6, 2004 at $26. Took the double, so to speak.
Later that same year, on Sept. 23, he initiated the stock with a buy at $32.40. That's pretty much where he took it off the list today. A stickler says he doesn't get credit for a $32 take-off because you couldn't sell it there, but let's give him that he round-tripped it, no worse.
A totalitarian critic might say that Rohan's 1-for-3, that he recommended it three times and made you money only once.
The good news, for me, at least, is there is nothing in that record that is so great that I have to say "Rohan's info trumps mine." Plus, I think that the stuff that he says is weak; the non-branded advertising is less of an issue for Yahoo! than for Google (GOOG:Nasdaq - commentary - research). When you subtract out the $4 per share that is Yahoo! Japan, you come up with about 40 times next year's earnings for one of the two fastest-growing companies out there. Not cheap, but not outrageous either, especially if it is your one high-multiple name in a diversified portfolio.
Bottom line: The initial foray into Rohan's Yahoo! view is mixed, not enough to send you to the exits.
It also, though, raises the stakes for the analyst. He's rolling the dice on this contra call, a real step up that is going to make him a hero or a goat. I've been there. For his sake, I hope he's right. For my sake as a shareholder in Yahoo!, I hope he's consistent with his record. "
(in www.realmoney.com)
By James J. Cramer
RealMoney.com Columnist
2/24/2005 10:04 AM EST
The record favors Yahoo! (YHOO:Nasdaq - commentary - research) in its ongoing battle with RBC's Jordan Rohan, the analyst who downgraded the stock today. I don't want to put too much emphasis on it, in part because I have to live in this town and work with people, but history is a dynamite taskmaster.
On March 1, 2002, Rohan upgraded Yahoo! at $7.46. He then downgraded it on Oct. 1, 2002, at $4.95. Not so hot.
Rohan then upgraded Yahoo! to outperform on June 16, 2003, at $14.80. Took guts to do that given the downgrade. I remember kidding him about it on television, which was tough but deserved medicine. He then downgraded it to neutral on April 6, 2004 at $26. Took the double, so to speak.
Later that same year, on Sept. 23, he initiated the stock with a buy at $32.40. That's pretty much where he took it off the list today. A stickler says he doesn't get credit for a $32 take-off because you couldn't sell it there, but let's give him that he round-tripped it, no worse.
A totalitarian critic might say that Rohan's 1-for-3, that he recommended it three times and made you money only once.
The good news, for me, at least, is there is nothing in that record that is so great that I have to say "Rohan's info trumps mine." Plus, I think that the stuff that he says is weak; the non-branded advertising is less of an issue for Yahoo! than for Google (GOOG:Nasdaq - commentary - research). When you subtract out the $4 per share that is Yahoo! Japan, you come up with about 40 times next year's earnings for one of the two fastest-growing companies out there. Not cheap, but not outrageous either, especially if it is your one high-multiple name in a diversified portfolio.
Bottom line: The initial foray into Rohan's Yahoo! view is mixed, not enough to send you to the exits.
It also, though, raises the stakes for the analyst. He's rolling the dice on this contra call, a real step up that is going to make him a hero or a goat. I've been there. For his sake, I hope he's right. For my sake as a shareholder in Yahoo!, I hope he's consistent with his record. "
(in www.realmoney.com)
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