In today’s Internet world it is not enough to simply be a “service provider” offering connectivity and search — you have to provide a wide range of other services to attract consumers. You have to be a one-stop source for news, gaming, social networking, email and other in-demand Web applications. In short, you must be an entertainment conglomerate.
The largest of the internet companies have been able to successfully cross this bridge — and their ranking in Portfolio Grader proves that it works. These companies are seeing strong sales and earnings growth.
AOL (AOL) has done a good job of transforming itself into a full-fledged Internet and mobile entertainment company. Since being spun off from Time Warner (TWX), the company has done a fantastic job of complementing its internet access services with entertainment, news and gaming. The website today offers a wide range of offerings designed to keep users in the AOL network.
Analysts have consistently underestimated the improvements at the company and in recent weeks have been scrambling to raise their estimates for the rest of 2013 and 2014. The stock has been a “buy” or “strong buy” in Portfolio Grader for the past year and continues to have the type of fundamentals that earn a “B” grade. AOL’s stock is a buy right now and should continue to reward shareholders.
Google (GOOG) may have started out as just another Internet search provider but it has grown to be far more than that. Today Google offer news, a browser, YouTube and an aggressive ad network. It’s constantly rolling out new services and products to attract and retain users. On the mobile side its Android operating system competes with the iPhone and has a strong user base. The company has gone from search to a full-fledged mobile and Internet information and entertainment complex. This transformation has given the company solid revenue and profit growth and the shares are currently rated a “buy” in Portfolio Grader.
Yahoo (YHOO) has completely reinvented itself in the past few years. Just last week it announced an acquisition of blogging site Tumblr (and its more than 100 million users) to further diversify its entertainment offerings. Yahoo also has one of the most widely used sites for sports coverage and fantasy sports and an acclaimed financial site that draws heavy user traffic. Analysts did not expect much from Yahoo in the past year, and the company has posted four consecutive huge positive earnings surprises. It is the top-rated Internet and entertainment company in the market today, getting an “A” from Portfolio Grader. The stock’s fundamentals are fantastic right now and the stock is a “strong buy.”
The Internet and entertainment world changes fast. Those who stay ahead of the curve will generate the type of growth that makes then highly rated in Portfolio Grader.
Louis Navellier is the editor of Blue Chip Growth.