Yet another article for going Long on Google (GOOGL)
Why go long on Google (GOOGL)? A ton of reasons. We add a few more to the list. The more I think about it the more I like Google as the one stock to own for 2015. I plan to start a position next week.
As we said this weekend Number One Stock Pick for 2015: Google Inc. Why is that? Android, Search, Chrome, Chromebooks, YouTube, Self-Driving Cars, Mobile & Internet Advertising, and the Wall Street analysts believe the stock is undervalued.
It was one stock that made 3 out of the 4 big articles for 2015 stock picks. Recall the Top Stock Picks for 2015 (Barrons, MarketWatch, CNN Money, Kiplinger). Of those 4 popular articles Googlewas the clear winner. A quick plug into Finviz.com and we see that the average analyst covering the stock thinks it will gain 21% this year. It is also very close to its 52 week low, about 7% away. We expect more clowns to start drinking the 'Google is the stock to buy for 2015' kool-aid in the coming weeks.
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We talk about Google again thanks to a great article via Fool.com:
Why I'm Buying Google Inc. Stock in 2015
According to alexa.com, Google.com is the most visited site not only in the United States, but on Earth. The average user visits the page 18 times per day, spending 17 minutes on it. More important, each search by each user enables the company to collect data that is of immense value to advertisers.
The dollars that come from those ads make up just a shade below 90% of Google's revenue. And while many worried that ads displayed on mobile devices -- which historically fetch less than ads on desktop computers -- would create a drag on ad revenue, that simply hasn't happened.
Fast Company described Google[x] as "the search giant's intensely private innovation lab, which is devoted to finding unusual solutions to huge global problems." What kind of solutions and problems?
According to Fast Company, four have already entered the final stages before commercialization: driverless cars, Google Glass, high-altitude Wi-Fi balloons, and glucose-monitoring contact lenses. One more was added to the list a few months back: a pill with nanoparticles that could detect deadly disease earlier.
Among the ideas that have been tried or discussed, but tabled: hoverboards, space elevators, and even teleportation.
Management: best in the business
As you can tell, I'm a big believer in everything Google has going. None of that would be possible if its leaders -- co-founders Larry Page (now CEO) and Brin -- weren't at the helm. They have perfected search, and are now embracing a culture open to failure in pursuit of big wins.
Both men are just 41 years young, and I could see them at the helm for two to three decades.
Currently, shares are trading for 21 times non-GAAP earnings, only a shade above the S&P 500's average of 20 times earnings. I consider that a very fair price for such a dominant player that still has a long runway for growth. Whether that means the stock will take off in 2015 specifically, or over a longer time frame, I can't say for sure.
But as a long-term investor, I will rest easy at night knowing that an even larger percentage of my portfolio is entrusted to these two, as well as the thousands working for them on creative solutions for the world.
Management knows that if only one or two projects come out of Google[x] every 10 years that have a huge effect, it would still be a big win for both Google, and humanity. As a shareholder, I want to be part of such a creative team, and have no doubt that, eventually, such a big hit will surface.
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