I’ve slowly started accumulated shares in what I see as the most under-valued tech stock in America: Yahoo! Inc (NASDAQ:YHOO). It’s not that I like Yahoo’s business model, but rather I like all the Asian pots that the company has its fingers in. Indeed, Yahoo’s locked away a 40 percent stake in what may be the hottest Internet property in the world right now: Alibaba Group.
A privately owned Web giant in China, Alibaba Group operates in just about every high-growth tech area in the country from cloud computing to payment processing (think Paypal), to online retail and international trade Web sites. The company also publishes Taobao.com, an eBay-like auction site that’s China’s third most-visited Web site, and an online classifieds site (similar to Craigslist) in Koubei.com.
As I wrote earlier, one writer at Fool.com values Yahoo’s Alibaba stake alone at more than Yahoo’s current market cap of $21.6 billion. Icing on the cake? Yahoo’s still the third most-visited Web site in the U.S. and the fourth most-visited Web site in the world. Revenue and net income declined at Yahoo during Q3, but analysts are expecting a better showing in Q4 with estimates around $0.22 per share.
No matter how uncertain the company’s future is, though, there’s no denying Yahoo’s got an incredible tech portfolio. And with rumors swirling that Alibaba Group may IPO later this year, Yahoo could cash in on what may be its best investment of all time. Buying shares in Yahoo, then, offers investors back-door access to a stake in Alibaba Group. And that’s worth as much as Yahoo is all on its own.
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