Google...is it priced right?

[thefed]

for the record, im just curious...not intending to buy...but google has been sliding for quite some time and i wonder where it'll stop


what seems to be an appropriate value for goog, using p/e or whatever you'd use to determine that? as u can tell i dont read charts much....just wondering if google is reasonably priced yet

 

[al_bundy]

don't matter, don't try to catch a falling knife buying a stock that fell 40% or so in such a short time. there is a good reason.

 

[clifp]

for the record, im just curious...not intending to buy...but google has been sliding for quite some time and i wonder where it'll stop


what seems to be an appropriate value for goog, using p/e or whatever you'd use to determine that? as u can tell i dont read charts much....just wondering if google is reasonably priced yet

FWIW (more than you paid for it but not much more) Morningstar has increased their moat rating of Google from narrow to wide and increased their fair value from $550 to $625/share.

I know CEO Eric Schmidt from college, and a few subsquent meetings. I can say that he and the other Google folks I know all fall into the scary smart category. Now how to translate brains into share price is the $64,000 question.

Sounds like most technical analyst think the stock is going lower.

 

[al_bundy]

it has nothing to do with smart management, but the law of large numbers. google's growth rate is slowing and i guess at $750 or whatever the high was, it was priced for 110% perfection.

a large part of google's revenue base is also going belly up

the stock didn't drop 40% because all the fund managers think it's a screaming buy and will keep going higher. you always have these crazy fears that wall street uses to shake retail investors out of their shares and this is why you see 20% to 30% corrections every once in a while, but 40% is too deep

 

[clifp]

Perhaps you are right. But it is worth noting that AAPL a multi billion company dropped form ~35 to 5 during 2000, and had a nice recovery back to $135. On the other CSCO an INTC both took huge plunges and never recovered.

I thing it is safe to say that depending on growth rates, margins, and ability to expand into new business you can reasonable argue that Google is worth anything between $100 and $1,000

 

[al_bundy]

AAPL is a William O'Neill poster child. he says any stock you buy should have 3 years of 25% growth in EPS at the minimum. he also says to buy stock in companies with an IPO in the last 8 years, but Apple is an exception. Steve Jobs coming back was like a second life

Steve Jobs comes back in 1997 and by the time it started soaring in 2003 it had several years of great earnings

Cisco and Intel both had growth rates that plunged in 2000 just as Google is experiencing now. not that Google is going to be like P&G, but the hypergrowth days are over for now. there was some metric they reported a few months back that is not growing as fast as it used to and that's when they started falling

MS had something similar. IPO in 1986, shot up and then fell and was dead money for years until Windows 95/Windows NT4. I bet in a few years Google will soar again

 

[fmhealth]

Tough one, but here we go. If, (and that's a BIG IF), GOOG continues to sell at a 34 PE & hits their '09 est.of around $25.00. You could make a bull case for a stock selling at upwards of $800.00!

For what it's worth, I continue to add to my position. My avg. price now is around $471.00. GOOG closed at $460.00 today. TREMENDOUS premiums available on both the Call & Put side. Significant intraday moves make this a trader's delight. Tight stops are mandatory, IMO, if you decide to play along.

In any event, please continue to do your own DD. Best of luck!!

FMH

 

[JB]

I set aside a small percentage of my portfolio for stock picks. The thing that's always kept me from buying Google is that the switching costs are virtually nothing. If a newcomer or current player introduce breakthough technology goog could be in serious trouble (the next Altavista.) If they continue to dominate, it's likely that the stock will do well.

 

[Art G]

OK, I'm going to pat myself on the back on this one. I suggested shorting GOOG when it was near $700 (see my short plays thread), and buy it at $419. I think it's going back to around $540. JMO though.

 

[Patrick]

OK, I'm going to pat myself on the back on this one. I suggested shorting GOOG when it was near $700 (see my short plays thread), and buy it at $419. I think it's going back to around $540. JMO though.

So do you recommend shorting it again @ $540?

 

[Art G]

So do you recommend shorting it again @ $540?

LOL! Thinking ahead? I can't say yet. Often times stocks make that inverted "N" on the chart and the stock plummets, but also, often times they test their support then head off to make new highs. I'd have to wait now to see how it does when it tests its' resistance.
BTW, a very insteresting stock right now is TNH. If it breaks below $100, I think it continues down below $70. However, if it holds these current levels, then watch for $200. My bet is it drops to $70, but I'm not betting with money right now (unfortunately, TNH doesn't offer options). JMO

 

[WarrantiesFurLess]

Interesting,

I was lucky enough to sell at near high of $729., and I am glad I did. Any company which is solely dependent on advertising is going to take a hit in a recession where the first thing companies do is cut their advertising costs. Since CountryWide was multi million dollar a month spender with PayPerClick industry, and now near bankrupt, no doubt the financial sector is pulling back on advertising, so I expect Google to continue slide for rest of year, so a buying opportunity will again come around in time.

Good luck to all, Mike

 

[Art G]

It looks like GOOG is reversing back down. It may be a hiccup, but I'd rather be on the sidelines with it right now. JMO.

 

[Notmuchlonger]

Well I guess they did pretty well today on their report.

 

[al_bundy]

they only beat revenue because of the fall in the dollar

we'll see how they do next week

 

[clifp]

Up 70 in after hours to $526

Funny I was looking at amazing volitality of Google options yesterday and wondering if would make sense to sell a straddle. Deciding that it was too risky and today I know why I came to that conclusion!

 

[al_bundy]

maybe one of the pro's can answer this

every year google spends a lot of money on capital expenditures. probably data centers and stuff like that. unless they count it in cost of revenues, i can't see where they are taking it as an expense

 

[Art G]

WOW! Missed it by this much! Got out one day early and it hits flat dab at the resistance line today.
We'll see if there is any way they break through. Might be a very good sign for the market if they can.

 

[Patrick]

GOOG @ $540.46 now. So does that mean it's going up or down from here?

 

[Art G]

Geez, I lost out out on a lot of money by selling my calls a couple days ago. I'd wait to see if GOOG can break through the resistance here. I don't think there's any hurry to buy right now. JMO

 

[clifp]

maybe one of the pro's can answer this

every year google spends a lot of money on capital expenditures. probably data centers and stuff like that. unless they count it in cost of revenues, i can't see where they are taking it as an expense

Not a pro but..

on the Balance Sheet I see a $700 million increase in property and equipment in Q1
On the Cash flow I see a Capital expendentures of $842 mil
Less depreciation of $280 million

I am guessing that most of the depreciation is include in the cost of revenue with some for R&D, GA, and marketing.

What a remarkably capital efficient business they run.

 

[al_bundy]

GOOG @ $540.46 now. So does that mean it's going up or down from here?

needs to fill in the gap first, that was a huge jump in the week

 

[Art G]

GOOG @ $540.46 now. So does that mean it's going up or down from here?

You are a persistent little bugger, aren't you?
I'd say you can't tell yet. Sometimes holding cash is a good thing. If you bought where I suggested, then enjoy your profit for a bit and see where it goes. In the mean time, MELI. JMO.

 

[Art G]

Breaking through resistance? Hmmmmm.

 

[Art G]

Well apparently GOOG wasn't a short play.