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Yahoo! (YHOO)

Today we have three recommendations from Blue Chip Growth Editor Louis Navellier. He’s taking profits on two long-term holdings, Dr. Pepper Snapple Group (DPS) and Novo Nordisk (NVO). If you bought either of those stocks when we picked up his recommendations in 2010, it’s now time to take your profits...

Today we have three recommendations from Blue Chip Growth Editor Louis Navellier. He’s taking profits on two long-term holdings, Dr. Pepper Snapple Group (DPS) and Novo Nordisk (NVO). If you bought either of those stocks when we picked up his recommendations in 2010, it’s now time to take your profits and redeploy the cash, perhaps into Yahoo (YHOO), one of Navellier’s Top 5 stocks this month. The new recommendation is below, and it’s followed by the two sell alerts:

Yahoo! (YHOO)

Yahoo is a diamond in the rough. Right now, technology is one of the weakest sectors because a strong U.S. dollar has weighed on the profits of many big players in Silicon Valley. Meanwhile, the shift to mobile has caught a lot of Internet corporations flatfooted, so many have been scrambling to catch up.

But not Yahoo. Ever since former Google exec Marissa Mayer took the helm as CEO, Yahoo has undergone some radical changes in the interest of being nimble. Most notably, the company has been snapping up app developers left and right; most recently, it scooped up Tumblr, a leading social media platform, for $1.1 billion. This is a big deal for Yahoo because Tumblr has a loyal following among its 300 million users.

These efforts have paid off, as shown by the company’s recent earnings announcement. In the second quarter, profit jumped 46% year-over-year to $331 million. Excluding special items, adjusted earnings came in at $0.35 per share; this beat the $0.30 consensus earnings estimate by 17%. Meanwhile revenues slid 7% year-over-year to $1.14 billion as the company reconfigured its strategy for its advertising business. But this was somewhat offset by Yahoo’s search business, which saw a 5% jump in revenues. So adjusted revenues came in at $1.07 billion, matching the consensus estimate.

I consider YHOO a great buy. Marissa Mayer has accomplished a lot in her first year at Yahoo, and I’m confident that the company will progress under her leadership. I also like the $5 billion stock buyback program—of which $1.9 billion remains. So this Moderately Aggressive stock remains a good buy under $31 per share.

Louis Navellier, Blue Chip Growth, www.bluechipgrowth.com, 800-718-8289, August 2013