US shares are us

The proceeds of my Vodafone sale finally cleared into my US-capable account on Tuesday and I bought into eBay and Ask Jeeves. I just couldn’t get excited about buying into Barclays. They seem to have good prospects but I couldn’t really say I understand a great deal about banking and there are more aggressive opportunities out there.

Once such opportunity is Ask Jeeves. Ask Jeeves run an Internet Search Engine – at ask.com and ask.co.uk. A Google competitor! The fact that ASKJ competes with GOOG has driven the share price down to an almost unbelievable level for an Internet growth stock. The trailing P/E is 29, the forward P/E is 14 and the growth rate is 25%! Negative fundamentals include almost 20% of the shares sold short and a smaller cash pile than many Internet stocks. The current share price at $23 looks like a fantastic opportunity to me and I have put my money where my mouth is with a purchase of 66 shares.

I also bought another 45 shares of eBay. I have explained before why I like eBay so much. There is a certain amount of negative sentiment surrounding eBay at the moment and it is driving the share price down, creating a buying opportunity. Some of the negative sentiment is valid but most of it is rubbish. For example people talk about the fact that some store owners have found it cheaper to setup their own website and buy keywords from Google rather than using an eBay store. This may be so but how many people know how to create there own website? How many people know how to create a database to hold their inventory details and order details? How many people know how to link the website to the database? How many people know how to buy keywords off Google? I’m sure that there are solutions out there that make this easier but I really don’t see Google as a direct competitor to eBay at the moment.

Anyway the deed has been done. eBay now occupies about 40% of my portfolio and I am well placed to profit from any return to positive sentiment by the market. The share price has fallen quite heavily since I bought more shares on Tuesday but that is par for the course!

Till next time.