Google: 90-second Investment Analysis

We’re gonna analyze Alphabet (let’s just
call it Google for this video) as an investment, and we’re gonna do it all in 90 seconds… You wanna keep up with stocks but you don’t
have time to read a lengthy report on every company that interests you. You’re busy. I get it. I respect that. So I took the most important considerations
from my research and packed it into 90 seconds. Use this to decide if it’s worth your time
to research further, to keep up with stocks you already own, or to just check in on some
of the largest companies in the world.

Fair warning: I’m obviously gonna go fast. Let’s put up a clock. And let’s do this! Google owns and operates the two largest search
engines and the largest email service provider in the world as well as many other products
and services at the forefront of technology and innovation. It derives most of its revenue from its online
advertising services. As of this taping, it currently has a market
capitalization of over $750B, with a price per share trading near $1,100. To own or not to own, that is the question. For me, there are two big reasons you might
want to consider owning Google: [1] They are super healthy.

The company’s net worth is over $160B. With
over $100B in cash and short-term investments! Compare all that to its debt of only $5B.
So they’re more than covered. [2] They always seem to be at the forefront
of innovation. Of course, that may not always be the case,
but with their extensive work in self-driving cars, artificial intelligence, and a long
list of other exciting technologies, many of which they don’t share with us, they
have a lot of potential catalysts for even more significant future growth. Oh and the founders Larry and Sergey although
still active each pay themselves only $1 each per year, and that’s just adorable… But here are a couple reasons to not own Google: Google doesn’t pay any dividends, which
is common for its industry, but you should always keep that in mind. It’s PE is 45 compared to other internet
stocks averaging 30 and the S&P 500 around 18. And based on its projected earnings growth,
a discounted cash flow calculation suggests that the stock is pretty overvalued.

Clearly, the market is pricing in growth. The concern then would be: if there is a bear
market before one of those potential catalysts I mentioned actually takes off, Google would
likely fall faster than the rest of the market. But if that innovation happens first, I think
the opposite would be true. … so what do you say: buy or no? Do you think one of those catalysts can take
off in a significant way before any sort of major market correction? I look forward to continuing this discussion
in the comments. If you found this helpful and would like to
see more, don’t forget to let me know by hitting that like button. Definitely subscribe and click the bell so
that you can keep up with all the companies we cover as we continue to help you build
your rapidly-growing, highly-diversified net worth. I’ll see you in the next one. Take care!.

As found on YouTube

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