Stock (Symbol) |
Google (GOOGL) |
Stock Price |
$729 |
Sector |
| Technology |
Data is as of |
| February 25, 2016 |
Expected to Report |
| N/A |
Company Description |
 Alphabet Inc is a collection of Companies. Alphabet’s collection include Calico, Google’s health and longevity effort; Nest its connected home business; Fiber, its gigabit internet arm; and its investment divisions such as Google Ventures and Google Capital, and incubator projects, such as Google X. These will be managed separately in Alphabet. On October 2, 2015, Google implemented a holding company reorganization pursuant to the Agreement and Plan of Merger (the Merger Agreement), dated as of October 2, 2015, among Google, Alphabet and Maple Technologies Inc., a Delaware corporation (Merger Sub), which resulted in Alphabet owning all of the outstanding capital stock of Google. Pursuant to the Alphabet Merger, Merger Sub, a direct, wholly owned subsidiary of Alphabet and an indirect, wholly owned subsidiary of Google, merged with and into Google, with Google surviving as a direct, wholly owned subsidiary of Alphabet. Source: Thomson Financial |
Sharek’s Take |
 Google (GOOGL) looks to have a solid 2016 with profits expecting to rise 17% this year. Personally, I think 20% is achievable as the company has focused its sights on doing things right for shareholders like controlling expenses and beating the street. Last qtr the company had 26% profit growth on 18% sales growth. Profits growing faster than sales is a good indicator of a healthy business. GOOGL also beat the street by 58 cents, and Annual Profit Estimates increased for the 3rd straight qtr. The stock rallied after the news was announced, but couldn’t keep the momentum going through rough stock market conditions. YouTube is doing well, and remains a key catalyst for future growth as streaming videos become even more popular. At 21x earnings, the stock is reasonable, and is attractive to both value and growth mutual fund managers who need big companies to invest in. I have GOOGLE in the Conservative Growth Portfolio and am looking to buy it in the Growth Portfolio on a pullback. |
One Year Chart |
 I’m writing this article on April 7th, but these charts are from February 25th. Why the delay? I have been wanting to add this stock back into the Growth Portfolio and was hoping to buy in low. I’ve been waiting for months now, and it doesn’t look to be happening as the stock is around $760 now. Looking at the one-year chart, I like the 26% profit growth last qtr as well as Estimates of 21% growth this qtr. The stock isn’t overpriced at 21x earnings considering Google has a good strong business model. Annual and qtrly estimates all increased this qtr, good job. Solid stock. |
Fair Value |
 My Fair Value on this stock is currently 23x earnings, which equates to a $794 stock price. With GOOGL trading within 10% of this Fair Value, I’ve been reluctant to buy more shares here. Also, the stock’s been rather lackluster recently and I feel we could be in for a Summer where stocks sell off some. Upside to 2017 is solid, thus the stock is at the top of my radar. |
Bottom Line |
 Google has done well during the last decade, but the ride had been a bumpy one until last year when management became more shareholder friendly. Right now the company is growing profits around 20% and with a P/E in the low 20s. I can envision the stock continuing to climb higher as large companies with solid double-digit growth are loved by mutual funds. GOOGL ranks 3rd of 34 stocks in the Conservative Growth Portfolio Power Rankings. I have the stock at the top of my radar for the Growth Portfolio and will try to buy it on a dip. |
Power Rankings |
Growth Stock Portfolio
N/AAggressive Growth Portfolio N/AConservative Stock Portfolio 3 of 34 |
