| Stock (Symbol) | Stock Price | |
Google (GOOG) |
$585 |
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| Data is as of | Expected to Report | Sector |
February 1, 2012 |
Apr 16 |
Technology |
| Sharek’s Take | ||
 Google (GOOG) once again let down the investors that depend on the stock. The company missed earnings estimates by almost a dollar and the stock dropped. This is the second time in less than a year the company hurt its investors (also see Google Doesn’t Care What You Think).On the positive side GOOG’s P/E is only 14 and this limits the stock’s downside. Profits look to grow in the teens, so it isn’t like growth is gone — I just wish this stock were more dependable. |
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| One-Year Chart | ||
 Here’s GOOG’s one-year chart. The recent drop was after reporting earnings. Profit growth was only 9% (ugh) and estimates show mid-teens growth coming the next two quarters. The P/E of 14 is less than the estimated Long Term Growth Rate of 18%. |
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| Earnings Table | ||
 Profits inched ahead 9% as sales jumped 28%. Profit should be growing as fast as sales, this isn’t good. One of the problems was cell phone ads are increasing, and these have lower profit margins than PC/laptop ads. GOOG missed analyst estimates by a whopping 93 cents. Google management doesn’t give earnings estimates, but in this case it might not have known profits were going to slow until during the quarter. People click, or they don’t, or they use their cell phone and click on a lower-margin ad. Annual Profit Estimates fell. Still, this company is set to make fifty-bucks next year. Wish investors could get part of that. Quarterly estimates dropped. Last quarter I saw 17% growth coming the next three quarters. Now that figure is only 13%. GOOG better beat. 4QtrOutEst is artificially high cuz GOOG just missed and the comparisons look great. |
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| Fair Value | ||
 I lowered GOOG’s Fair Value P/E from 18 to 16. I wish GOOG were more dependable. |
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| Ten-Year Chart | ||
 I really thought GOOG was going to break out of this long base and head to All-Time highs. For such a big company, management doesn’t do a good enough job pleasing analysts. That’s why the stock isn’t going up. On the other hand IBM (IBM) pleases investors, and the stock does well even though GOOG is growing faster. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
12 of 20 |
Google is the 12th best stock in the 20 stock Growth Portfolio Power Rankings. The stock has recovered a bit from its after-earnings drop and is a good value at this point. I wish it were more dependable. I will sell Google from the Aggressive Growth Portfolio today. Profits grew only 9% last quarter. In addition, 13% growth is estimated for the next three quarters and that’s not certain given GOOG just missed big time. I can find better stocks for this portfolio. |
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Aggressive Growth Portfolio
N/A |
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