Buy These Four Internet Stocks on the Pullback - Stifel

Stifel analyst Jordan Rohan is highlighting four Internet stocks to buy for earnings-related outperformance after the recent pullback in the sector. He notes that since the March 2009 market lows, there have been 12 times the Nasdaq has fallen by 5% or more, including the current pullback of 6%. The average pullback has been 9% and the largest 18% in August 2011. His four picks are:

Facebook (NASDAQ: FB) is down 21% from peak levels and trades at about the same forward P/E multiple as it did last year, even after adjusting for nearly 10% in dilution for acquisitions that we assume will have zero earnings contribution. Checks are positive.

RetailMeNot (NASDAQ: SALE) shares are down 27% which some blame on the recent IPO of Coupons.com. The firm notes that businesses do not overlap significantly - 75% of the revenue generated by Coupons.com comes from Consumer Packaged Goods companies, while the vast majority of RetailMeNot's revenue comes from national retailers.

Netflix (NASDAQ: NFLX) has been hit as a a number of actual (Amazon) and rumored (Apple) tv-based services have been creating noise around the Netflix story. These products are focused on the transactional (VOD and EST) markets and not the Netflix SVOD market, the analysts highlights.

Yahoo! (NASDAQ: YHOO) is a Buy as Alibaba continues to be the key driver of value for YHOO shareholders -- they expect the metrics that Yahoo discloses related to Alibaba will show slight sequential acceleration from the 3Q13 levels.

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