In his recent article, Can New Yahoo! CEO Deliver on Lofty Promises?, Sasha Cekerevac reports on the latest Yahoo! development. According to the Profit Confidential contributor, CEO Scott Thompson declared that his goal is to have 20% annual revenue growth for Yahoo!. However, Cekerevac thinks this is only part of his goal.

“I believe that Thompson is making the recent job cuts and talking up the prospect to make the firm look pretty for a sale,” says Cekerevac. “A leaner organization is easier to sell; the one resolution that many investors are hoping for.”

In his Profit Confidential article, Cekerevac notes that most of the value of Yahoo! USA is built on Alibaba and Yahoo! Japan.

“I do applaud management at Yahoo! for the recent cost-cutting, which is helping to increase corporate earnings,” says Cekerevac, “But cost-cutting does not mean revenue growth. There is a level at which you can’t cut anymore, because you’ve already reduced all excess fat and there’s nothing left to cut.”

“Of the $20.0-billion market value for Yahoo!, I would say approximately $18.0 billion is for the Alibaba and Yahoo! Japan portion,” says Cekerevac. “The other positive for the stock that might entice a buyer is the fact that it has over $2.0 billion in cash.”

Thompson indicated he would like to move on more aggressively to mobile phones, but Cekerevac doesn’t see how he’ll accomplish this transition.

Cekerevac believes that, if someone were to invest in Yahoo!, they would be betting on monetizing the other parts of the business and not on corporate earnings growth.

“Frankly, you’re not paying for this growth, because there isn’t much, as compared to other technology stocks, but rather are hoping for a sale or split of the company,” says Cekerevac.

“I can’t argue with the logic hoping for a sale; at the current price level there isn’t much downside,” says Cekerevac. “On the other hand, the funds invested could be dead money for a long period of time, when you could be investing in technology stocks with much bigger growth potential.”

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Michael Lombardi, MBA, the lead Profit Confidential editorial contributor, has just released his most recent update of Critical Warning Number Six, a breakthrough video with Lombardi’s current predictions for the U.S. economy, stock market, U.S. dollar, euro, interest rates and inflation. To see the video, visit http://www.profitconfidential.com/critical-warning-number-six.