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January 20, 2014  Mon 4:10 AM CT

Something's been bothering me about Twitter--the negativity surrounding it versus what the stock is doing.

In the last few weeks there have been a tremendous number of downgrades of the stock as it roared to the $70s from the $40s, yet it's barely been nicked. Of the 27 analysts following the company, there are only eight "buys," 10 "holds," and nine "sells." That's right, nine "sells." Let me tell you, I think that level of skepticism is almost unheard of unless the company's a borderline fraud, and Twitter is anything but a fraud. It's a real company with real revenue and real growth, just no earnings.

That lack of earnings bothers me because I don't want to get caught up in another bubble like we had with the Internet at the turn of the century. At that time, we had tons of companies come public, and they all had fabulous growth stories attached to them with no real prospect of making money. That's what Twitter looks like now.

But back then, unlike now, the analysts were all in. You never heard a cautionary word when it came to any of those deals. They were all equally ballyhooed and the research community seemed totally bought off. The idea of even one Sell on one of those stocks, let alone the nine on Twitter, would have been ridiculous.

This brings me to Friday's Twitter Buy recommendation from my old friend Jordan Rohan at Stifel Nicolaus, entitled, "@Twitter, why it is far too early to be focused solely on valuation." He makes the same case for Twitter that I have been making for ages about Yelp: The opportunity is so great that you can't afford to be bound up in traditional metrics.

I have liked Yelp because it is uniquely made for handheld devices, there's no real competition, and it can continue to grow like Amazon, another stock I have liked for ages because it knows that the sky's the limit and can't be bothered with showing earnings, even as it would be possible if it wanted to. logoNow consider this quote from Rohan's report: "In essence we believe Twitter's is the most powerful, flexible, and disruptive of the social media platforms, giving it significant scarcity value. We believe this value is hard to quantify and does not yet show up in earnings. Over time we believe the company will harness the power of this strategic position benefiting consumers and shareholders alike."

That's right, Rohan is saying that Twitter's part of the holy trinity of must-buy techs I describe in my new book, "Get Rich Carefully," because they grasp the social, the mobile, and the cloud portions of the digital universe.

Rohan is not saying that earnings will explode. Far from it. He's not even talking about earnings. He has to use other metrics, like enterprise values to sales, and even when he goes into that stretch, Twitter is not cheap versus its peers, selling at 15x enterprise value to sales versus Facebook's 8.9x and Yelp's 9.9x valuation. No other group in the market trades anywhere near that level, which is why I have been so stuck on not pushing it up here.

But Rohan says that advertisers are starting to embrace Twitter in increasing numbers and they love the ungated nature of it--meaning, unlike Facebook, it is an open network that can go viral, which is of immense help to advertisers. He likes the companion aspect to television, the preferred media for advertisers, and he loves that Twitter's only just beginning to monetize international. In other words, it might be Facebook four years ago when you really did want to get into it, when it had remarkably accelerating revenue growth.

I still would be plenty skeptical of Rohan's recommendation if it weren't for the coup de grace point he then makes: A tremendous number of analysts hate it. That makes for a slew of upgrades if Twitter does anything surprisingly positive, and he is saying it will do many things surprisingly positive. I like his thinking.

I'm still on the fence, having missed a huge number of points and unwilling to say, "Hey, so what?" But let's put it this way: If you want to know why Twitter trades here, go read the Stifel report. I'm a total skeptic, but this report makes too much sense (particularly because I like Yelp) to just write off Twitter as too expensive. Instead, it makes me want to pounce on any big price break. The problem might be that others will do so, too--and we might not get one any time soon.

Cramer's charitable trust has no positions in the stocks mentioned.
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