The Zacks Analyst Blog Highlights: Yahoo!, Sandisk, Group, AOL and SLM

The Zacks Analyst Blog Highlights: Yahoo!, Sandisk, Group, AOL and SLM

PR Newswire

CHICAGO, April 15, 2013

CHICAGO, April 15, 2013 /PRNewswire/ -- announces the list of stocks
featured in the Analyst Blog. Every day the Zacks Equity Research analysts
discuss the latest news and events impacting stocks and the financial markets.
Stocks recently featured in the blog include Yahoo! Inc. (Nasdaq:YHOO),
Sandisk Corp. (Nasdaq:SNDK), Group Inc. (Nasdaq:WWWW), AOL Inc.
(NYSE:AOL) and SLM Corporation (Nasdaq:SLM).


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Here are highlights from Friday's Analyst Blog:

Earnings Preview: Yahoo!

Yahoo! Inc. (Nasdaq:YHOO) is set to report first quarter 2013 results on Apr
16. Last quarter it posted an 18% positive surprise. Let's see how things are
shaping up for this announcement.

Growth Factors this Past Quarter

Yahoo's fourth quarter 2012 revenues were up 12.0% sequentially and 1.6% year
over year. Display revenues (ex-TAC) increased 15.2% sequentially while
declining 4.6% from the comparable quarter of 2011. Management attributed the
year-over-year decline to declining engagement on key properties, primarily

Yahoo's display business was under pressure given the growing success of
archrival Google and Facebook. Yahoo was steadily losing its market share.

However, under its new CEO Marissa Meyer, Yahoo has been active on the
acquisition front. It acquired 5 start ups mainly in the mobile space. The
acquisitions are part of a strategy to broaden and strengthen Yahoo's
expertise in the mobile segment as adoption of mobile devices such as
smartphones and tablets continue to accelerate.

With these acquisitions, Yahoo is picking up a whole lot of engineering talent
as well as key technologies and products at a cheaper rate. Yahoo also expects
that these acquisitions will enable it to enter the emerging social marketing
segment, where its rivals have already established themselves.

Earnings Whispers?

Our proven model does not conclusively show that Yahoo is likely to beat
earnings this quarter. This is because a stock needs to have both a positive
Earnings ESP (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank #1,
#2 or #3 for this to happen. That is not the case here as you will see below.

Zacks ESP: The Expected Surprise Prediction or ESP, which represents the
difference between the Most Accurate estimate and the Zacks Consensus
Estimate, is 0.00%.

Zacks Rank #1 (Strong Buy): Yahoo's Zacks Rank #1 (Strong Buy) increases the
predictive power of ESP and the Zacks Rank #1 when combined with an ESP of
0.00% indicates the possibility of a positive surprise. We caution against
stocks with Zacks Ranks #4 and #5 (Sell rated stocks) going into the earnings
announcement, especially when the company is seeing negative estimate
revisions momentum.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows that
they have the right combination of elements to post an earnings beat this

Sandisk Corp. (Nasdaq:SNDK), with an ESP of +9.09% and a Zacks Rank #1 (Strong
Buy). Group Inc. (Nasdaq:WWWW) , with an ESP of +5.13% and a Zacks Rank #2

AOL Inc. (NYSE:AOL), with an ESP of +3.03% and a Zacks Rank #3 (Hold).

Sallie Mae Sheds Student Loan Stake

SLM Corporation (Nasdaq:SLM) , also known as Sallie Mae, declared that it has
completed the sale of its remaining interest in its SLM Student Loan Trust
2006-2 securitization to a third party. However, under the existing contract,
Sallie Mae will continue servicing student loans in the trust.

The sale will result in the elimination of student loans worth $2.03 billion
and associated liabilities worth $1.99 billion from Sallie Mae's balance
sheet. Further, the gain from the deal will result in additional 13 cents per
share to Sallie Mae's second-quarter 2013 GAAP as well as core earnings.

In Mar 2012, both the House and the Senate passed a bill to overhaul the
student loan program, ending the Federal Family Education Loan Program (FFELP)
that provided federal subsidies to private lenders.

As a result of this, federally guaranteed student loans would be originated
under the Direct Loan Program run by the U.S. Department of Education and the
role of private lenders will be eliminated. Therefore, Sallie Mae stopped
originating new federally guaranteed student loans after Jun 30, 2012 to
comply with the legislation.

Despite challenges, we believe that its leading position in the student
lending market, diversifying efforts and increasing private student loan
originations would help the company navigate the current cycle.

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