GOOG (ALPHABET INC)
- P/E: 31.7
- GAAP DILUTED EPS GROWTH Q4 '15 to Q4 '16: $.50
- SECTOR: TECHNOLOGY SERVICES
- ASSETS-LIABILITIES: 5.8
- DIVIDEND: NONE
This stock is a new addition to my
portfolio. The price-to-earnings multiple is higher than my target
price-to-earnings multiple, but I decided to purchase the stock due
to its solid year-over-year EPS growth, positive chart alignment,
positive cash flow, ubiquitous market presence, and rapid growth in
the technology sector. I believe this stock will head much higher,
and that its earnings will keep up with the rapid pace of its growth
to ensure its stability.
Google became a popular product due to
its excellent search engine. As a result of its success, with
approximately 80.5% of global market share according to a recent
survey, Google has built a strong revenue base through its
advertising services. However, Google has taken the challenge of
expanding its services beyond the search engine field into
electronics. I myself own a google android phone. I utilize chrome
for my web browsing. My heavy use of both of these products derives
not from brand loyalty, but rather ease of use. It is simple to sync
my google account so that I can save preferences, browsing history,
e-mails, and contacts across my devices. Most people I know who do
not have Apple products use google. Taking the expanding businesses
into consideration, Google has a solid blueprint for exponential
growth of income.
Solidifying my confidence in this
investment is the company's strong financial foundation. The
year-over-year EPS growth for Q4 was positive at $.50 per share, with
a revenue increase of 22%, according to their most recent earnings
press release. The company has 5.8 times as much assets as
liabilities, giving them a large cash flow. The only two drawbacks
to the stock are the lack of a dividend and the high
price-to-earnings multiple, in my opinion. The strong growth of the
company and consumer confidence will foster the stock's growth in
unison with its growth of business.
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