We're halfway through 2007, so I thought it would be interesting to check this year's ticker performances to date for the four most prominent public Internet companies. Here we go:
Amazon.com
Closing stock price, Dec. 29, 2006: $39.46
Closing stock price, June 29, 2007: $68.41
Year to date: Up 74%
eBay
Closing stock price, Dec. 29, 2006: $30.07
Closing stock price, June 29, 2007: $32.18
Year to date: Up 7%
Google
Closing stock price, Dec. 29, 2006: $460.48
Closing stock price, June 29, 2007: $522.70
Year to date: Up 14%
Yahoo!
Closing stock price, Dec. 29, 2006: $25.54
Closing stock price, June 29, 2007: $27.13
Year to date: Up 6%
There's only one huge winner on the list, and that's online retailer Amazon.com. And despite the turbulence surrounding Yahoo!, shares of the embattled Internet graybeard have appreciated almost as much as auction site eBay's have so far in 2007.
Given the backlash Google has endured in recent months, one might expect some downward pressure on the search giant's stock. But it has held up well through the first two quarters.
Amazon shareholders might want to keep this in mind, however: Based on the price to earnings ratio, the company's stock is overvalued and due for a correction. For those unfamiliar with P/E ratios, basically it's how much investors are paying for a firm's stock relative to the income or profit earned per share. And the higher the P/E ratio, the more investors are paying.
Right now AMZN has a P/E ratio of 118. That compares to Google's P/E ratio of 47, eBay's 37 and Yahoo's! 51. Based on these numbers and my keen market sense, I'd put my money on eBay and Google to outperform the other two in the second half of 2007.
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