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GOOG STOCK WRITE UP


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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