Google Still Offers Reasonable Value But Only For Long-Term Investors
by Tim Travis
With all of the hysteria surrounding the decline of Apple's (AAPL) stock price, there has been slightly less media attention regarding the continued ascension of Google's (GOOG) stock price. Google's stock has staged a nearly 51% climb from its 52 week low of $556.52, to a recent high of $840.15. We profiled the stock bullishly on two occasions near the lows, because the market clearly wasn't appreciating Google's durable competitive advantages that are likely to lead to a reasonably long runway of above-average revenue and earnings growth. Google to me is the preeminent advertising company in the world, leveraging its role as the primary focus of corporate advertising budgets to leverage incredible technological innovation on a scale that has little precedence. The biggest risk to the company's moat occurred on the transition to mobile advertising, but the company was a first-mover in that market, willing to lose money over the short-term to build incredible value over the long-term. For these reasons Google is the technology business that I'd most love to own for future profits, but I'd only suggest holding the stock at current prices if you are a true buy and hold investor, willing to endure a potential 30-40% sell-off. To be clear I am not forecasting this type of decline for Google, but investors buying at these prices are likely to be momentum investors, that tend to jump off the bandwagon based on price movement, as opposed to changes in the fundamentals. read more »
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