S&P Capital Thinks It's The Right Time To Buy Twitter And Yahoo

Scott Kessler, S&P Capital IQ deputy director of global equity research and head of technology sector equity research, was on CNBC Tuesday to discuss his outlook on Twitter Inc (NYSE: TWTR) prior to its second-quarter earnings release and if it is the right time to buy the stock.

Good Things Could Happen At Twitter

"After that debacle (first-quarter earnings release in late April), I guess I would call it, in terms of how the earnings were released and then how the company dealt with the aftermath of that," Kessler said. "We upgraded the stock at that point; we ended up getting it at a price at around the high 30s or so. So, the stock is down from that level, but frankly we see a lot of value in Twitter."

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He continued, "We think it's a stock, a company, that people frankly misunderstand pretty significantly. Think about the value; think about what they are doing.

"We think there are a lot of winds of change blowing when it comes to Twitter, and a lot of good things could happen there."

Right Time To Buy Twitter And Yahoo

Kessler was asked if this is the right time to buy Twitter and Yahoo! Inc. (NASDAQ: YHOO). He replied, "On one hand, our strategy team has an Overweight opinion on the technology sector; on the other hand, it would be, I think, foolhardy not to acknowledge that over the last number of years when we have seen a correction in the technology sector, it has tended to occur during the summer months.

"That's when inventory is building; there is less economic activity. Europe, for the most part, is on vacation in August, and folks really are looking toward the fourth quarter. So, I think, opportunities will present themselves. But in names like Twitter and Yahoo, we think the time is now, and we actually have a Strong Buy," Kessler concluded.

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