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All About Motorola

Stock (Symbol) Stock Price

Google (GOOG)

$1177

Data is as of Expected to Report Sector

February 9, 2014

Apr 14 – Apr 18

Technology

Sharek’s Take
David SharekGoogle’s (GOOG) bought Motorola Mobility in 2011 and last month management decided to dump the money-sucking acquisition. I don’t care that Google paid $12.5 billion only to sell Motorola for $3 billion, what I care about is the profits. Motorola’s money-losing operation has pulled down GOOG profits for multiple quarters, and now that this part of the organization is gone I think profits are set to flow. I feel Google will come in with profit growth of greater than 25% and beat the street in the coming quarters, and this will push the stock up to new All-Time highs. I will purchase GOOG today for the Growth Portfolio.
One-Year Chart
GOOG_2014_Q1GOOG broke out when it burst past $1000, and volume was high so I should have bought. Here’s my take then. Since then the P/E’s gone from 20 to 23, but the outlook is much better than it was. These numbers at the bottom don’t inspire me.
 Earnings Table
GOOG_2014_Q1_EPSGoogle grew sales 39% last quarter, profits just 13% with Motorola dragging down profitability.
 
GOOG missed by 20 cents too. This company has proven unreliable in hitting analyst estimates, GOOG gets a low grade for certainty.
 
Analysts will likely up Annual Profit Estimates in the coming quarters.
 
But either way, quarterly profit growth looks good once we get past this quarter.
Fair Value
GOOG_2014_Q1_PHI feel GOOG is worth 25 times earnings now. The stock is around $1200 today and I think its worth $1300. I own many other stocks with better upside but Google is growing rapidly for a large company and needs to be in my portfolio.
Ten-Year Chart
GOOG_2014_Q1_10yrThe Annual Profits along the right look good, but the stock has been hard to handle for many years now. I originally bought GOOG around $180 and should have held it the entire time, but the profit growth rate has been slow at times and the company routinely misses estimates and has lots of below-par quarters.
Power Ranking Bottom Line
Growth Portfolio

12 of 27

Google is timely and will be a leading large cap growth stock to own for the next 12 to 18 months as profits are now set to flow. The negatives about GOOG are it is a wild horse that jumps in different directions without warning and the stock is already close to its Fair Value.
 
GOOG is ranked 12th of 27 stocks in the Growth Portfolio Power Rankings. Although the stock is timely, it doesn’t have enough upside for the Aggressive Growth Portfolio.

Aggressive Growth Portfolio

N/A

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