by Jeff Reeves | August 23, 2013 7:00 am
There’s no question we’re living in an internet age, with digital media and mobile devices reshaping the way consumers and businesses go about their days.
As investors, then, it’s important to build your portfolio with an eye towards the web. Increasingly, the entrenched internet stocks out there are no longer risky tech plays but stable, long-term investments with dominant reach and little risk of being bumped from their perch anytime soon.
These internet stocks can span media empires, social media sites and e-commerce platforms. But the one thing they have in common is outperformance, with 8 of the following 10 stocks all posting market-beating profits so far in 2013.
And even more important than past performance is the potential for future growth and further dominance as the web becomes even more omnipresent … and lucrative to the right internet stocks.
Here are the 10 best internet stocks now, based on recent comScore rankings:
comScore rank: #13 out of all web properties in the U.S.
Monthly unique visitors: Over 71 million
YTD stock performance: +1% vs. +16% for the S&P 500
More than just an auction site, eBay (EBAY) has evolved into a true e-commerce platform with its marketplace model that allows merchants to sell goods at fixed prices. Coupled with its powerful PayPal payments division, which now accounts for half of total revenue at eBay, this internet stock is well-positioned to cash in on online shopping trends for years to come.
comScore rank: #11 out of all web properties in the U.S.
Monthly unique visitors: Over 75 million
YTD stock performance: -6%
You wouldn’t think of Apple (AAPL) as an internet stock, but the fact is that its website logs a huge amount traffic each month. Some of this is device sales, some of it is simply consumers looking for info to compare the latest iPhone and iPad with other models, and some of it is customers seeking out content via the iTunes store or other areas of Apple. This web reach beyond simply hardware sales is an important characteristic but a fairly well-kept secret about Apple.
comScore rank: #10 out of all web properties in the U.S.
Monthly unique visitors: Over 77 million
YTD stock performance: +30%
Time Warner (TWX), or more specifically its Turner Digital division, is behind a host of big sites like news giant CNN and sports site Bleacher Report. That makes it a powerful brand in the universe of online content — something that investors may not be aware of if they only think about TWX in terms of its cable television offerings and film production businesses.
comScore rank: #9 out of all web properties in the U.S.
Monthly unique visitors: Over 81 million
YTD stock performance: +38%
As with Time Warner, CBS (CBS) is a media empire that has a vast reach into the internet space — something investors might overlook at first glance. Whether it’s under the company’s own nameplate via CBS Sports or under secondary properties like tech site CNET or streaming radio portal last.fm, CBS Interactive is a force to be reckoned with in the internet age, despite the old-school broadcasting roots of the parent company.
comScore rank: #6 out of all web properties in the U.S.
Monthly unique visitors: Over 110 million
YTD stock performance: +16%
When it comes to e-commerce, there’s no bigger name than Amazon (AMZN). What started out as the world’s biggest online bookstore has now become the world’s largest everything store. To top it off, AMZN is pushing big into digital content with its Amazon Prime video streaming services — and dabbling in data services to boot. There are fewer companies that have more internet credibility than ever-dominant Amazon.
comScore rank: #5 out of all web properties in the U.S.
Monthly unique visitors: Over 117 million
YTD stock performance: +16%
AOL (AOL) has its troubles when it comes to growth and profits, to be sure. But one thing that AOL is not struggling with is overall reach through its flagship AOL homepages as well as the dominant Huffington Post family of sites. Up-and-coming Patch sites, a hyper-local news and blogging effort, continue to hold promise, too, even if profits are elusive. The bottom line notwithstanding, it’s hard to argue that AOL isn’t a powerful brand in the internet content business.
comScore rank: #4 out of all web properties in the U.S.
Monthly unique visitors: Over 142 million
YTD stock performance: +45%
Facebook (FB) only had its IPO a little more than a year ago and isn’t yet 10 years old, but this fast-growing social network has become a mainstay of internet use everywhere. Whether you’re a teen catching up with friends or a grandparent sharing photos of the new baby, everyone has a use for Facebook. This makes the company, while young, one of the most powerful internet players out there.
comScore rank: #3 out of all web properties in the U.S.
Monthly unique visitors: Over 179 million
YTD stock performance: +21%
While Microsoft (MSFT) still makes its biggest chunk of change off of Windows and PC-related software, it’s important not to overlook the digital footprint of Microsoft’s family of websites — including MSN. As one of the largest “portals” out there with its Hotmail (now Outlook) web-based email addresses, there is a huge captive audience here for Microsoft to capitalize on.
comScore rank: #2 out of all web properties in the U.S.
Monthly unique visitors: Over 192 million
YTD stock performance: +23%
What’s not to like about Google (GOOG) when it comes to internet operations? It’s YouTube property is the dominant video site on the web, Gmail and Google Docs are mainstays of both business and personal communication, Google Maps is a mainstay of travelers everywhere … Google is a verb for Pete’s sake, and the gold standard of internet search. When it comes to internet stocks, Google is head and shoulders above the rest.
comScore rank: #1 out of all web properties in the U.S.
Monthly unique visitors: Over 196 million
YTD stock performance: +39%
Yahoo (YHOO) surprised many by outpacing Google in total visitors in the latest comScore report. But with its many properties, it’s not hard to see how the company did it. From the Yahoo! family of sites that cover sports and finance to the recently acquired Tumblr blogging platform and smaller niches like Flickr the photo sharing portal … YHOO is huge. The company just as much a mainstay as Google, and the latest numbers prove it.
Jeff Reeves is the editor of InvestorPlace.com and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” As of this writing, he was long P. Write him at email@example.com or follow him on Twitter via @JeffReevesIP.
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