Buy Alert: September 24, 2014

| September 24, 2014

Buy Alert:  September 24, 2014

 

Trade Details

Buy Yahoo (YHOO) November 42 Calls for $1.55 or better

 

Why?

YHOO has sold off recently after selling part of its stake in Alibaba (BABA). First off, the company’s remaining stake in BABA, plus its stake in Yahoo Japan, are worth a combined $45 billion or so. The company’s current market cap is just under $40 billion. How is this possible? Essentially, it shouldn’t be.

Moreover, YHOO now has about $6 billion (after taxes) from its sale of BABA to play with. That $6 billion is going to be used for something – perhaps a big acquisition.

In other words, there are multiple reasons why this stock is too cheap. We’ll buy out to November to give this trade time to develop.

 

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Category: OTW Buy Alerts