Thursday, April 25, 2013

Analysis of Google

An American internet company

Company: Google

Business: As of yet they have stayed in the shadows a little. Doing their internet information thing "Google it!" asking for advertising money and making sure that companies earn a place "high" up in the list. It is a very good business and they have done very well. I would still say that they have the best product. They are now very close to expand into the physical world with their Google glasses. I find this excellent. Good job Google! I personally forget everything I say and write and do and Google glasses would maybe be able to keep me on track on things.

Active: All over the world.

P/E: 24.6


So the P/E of Google is high with its 24.6 and the P/B is also high so for Graham it was a no, no investment since there just was not enough security for buying this stock. But Google is making 21% on each brought in dollar and that is good. They have a lot of money in their coffers. By percentage even more than Apple! In the last five years they have had a growth of 18% per year which gives a motivated P/E well above 50. This means that they stock should and could double in value. They spend an healthy amount on R&D to make sure that they are ahead of any competitors. They pay no dividends which I find very bad.

Conclusion: Google definitely has potential. They are continuously pushing into new fields and new boarders while at the same time keeping their cash cow out of reach for competitors. I could buy this stock today but I hope that I will find others that are even better.

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