Google Inc. (NASDAQ/GOOG) is up seven-fold from its initial price and could be well on its way to being the first $1,000 stock. Another heavy-hitter is priceline.com Incorporated (NASDAQ/PCLN), at over $700.00 a share and sizzling on the charts. At a new 52-week high, eBay Inc. (NASDAQ/EBAY) continues to dominate the Internet retail space. The commonality between all three of these companies is that they are all leaders in their respective Internet space, based on my stock analysis. There are pundits suggesting the best years for the Internet stocks are now behind us. I don’t believe that.
In just less than four months, Groupon, Inc. (NASDAQ/GRPN) has more than doubled in value from its 52-week low of $2.60 on November 12, 2012. The company’s business model of providing daily deals on goods and services is interesting, but it is not immune to the rising competition from rivals, since the barriers to entry into this space are relatively low, based on my stock analysis. Unfortunately, my stock analysis suggests that while Groupon was an early entrant in its business, numerous companies are surfacing and pushing Groupon to defend itself by trying to offer an advantage for the user. As shown in the chart below, Groupon broke out at $5.50 resistance, but recently, it sold off with a downside gap after disappointing results; yet the chart shows a possible rally, according to my technical analysis.
Chart courtesy of www.StockCharts.com
My stock analysis indicates that not only does Groupon face competition from the likes of Yelp, Inc. (NYSE/YELP), Google, and Amazon.com, Inc. (NASDAQ/AMZN), but it now faces competition from eBay, which launched a similar daily deal site called “Lifestyle Deals” that offers heavy discounts on different products and services. (Source: eBay Inc. web site, last accessed March 5, 2013.) My stock analysis indicates that this move by eBay is a trial run to test acceptance, focusing on areas in California and Washington, DC. My stock analysis suggests that eBay, with its more than 200 million users around the world, is looking at new areas to generate revenues in what has become a competitive online marketplace.
In my view, the major Internet companies are all looking at new areas of growth. The commonality is the massive user base that’s available to each. The strength of Facebook, Inc. (NASDAQ/FB) is its more than one billion members, which is a significant resource to try to monetize and generate mass revenues, according to my stock analysis. Facebook CEO Mark Zuckerberg realizes this, and I remain intrigued by the company simply because of its user base. My stock analysis notes that if Facebook can monetize its users, the stock will move much higher over the longer term.
Chart courtesy of www.StockCharts.com
My stock analysis indicates that the companies that could have the upper edge in the Internet space are Google, eBay, priceline.com, and Amazon.com. All four are established companies with excellent leadership and hundreds of millions of users. I recommend sticking with these market-leading Internet-related stocks. A longer shot is Yahoo! Inc. (NASDAQ/YHOO), which just reported an excellent quarter under CEO Marissa A. Mayer. I also like LinkedIn Corporation (NASDAQ/LNKD) in the professional social networking space.
Please note: the information contained in this article is not to be construed as advice to buy any of the stocks mentioned; rather, it is meant to provide examples of a good investment opportunity.
By: George Leong
Posted: March 6, 2013, 3:22 pm
We believe the stock market and the economy have been propped up since 2009 by artificially low interest rates, never-ending government borrowing and an unprecedented expansion of our money supply....