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Google, Inc. (GOOG)

“We’re always interested in big, well-traded growth stocks that gap up strongly on earnings—such a move usually...

“We’re always interested in big, well-traded growth stocks that gap up strongly on earnings—such a move usually indicates something exciting is brewing. In Google, Inc.’s (GOOG, Nasdaq) case, the company is reinventing itself as its core online paid-click ad business slows from the rapid growth seen in the mid-2000s. The two areas management is most excited about are non-text display ads (such as those seen on YouTube, a site that now attracts two billion views per week), which are now bringing in revenue at an annual rate of $2.5 billion, and mobile (boosted by the firm’s Android platform, which leads to more mobile searches), which is tracking at a $1 billion run rate. These businesses helped Google crush earnings estimates last Thursday evening and left analysts scrambling to hike their outlooks. It’s not going to double in a month, but we feel the stock has upside as institutional investors build positions.

“Technical Analysis: GOOG topped out in January and underperformed the market for most of the next eight months. But after building a bottom, in the mid-400s, shares performed well as soon as the market got going on September 1, a small sign that the stock’s character was changing. And then the stock gapped up 11% last Friday on huge volume following its results. We think you can buy GOOG here or on any weakness.”

Michael Cintolo, Cabot Top Ten Weekly, 10/18/10

A growth stock and market timing expert, Michael Cintolo is Chief Investment Strategist of Cabot Wealth Network and Chief Analyst of Cabot Growth Investor and Cabot Top Ten Trader. Since joining Cabot in 1999, Mike has uncovered exceptional growth stocks and helped to create new tools and rules for buying and selling stocks. Perhaps most notable was his development of the proprietary trend-following market timing system, Cabot Tides, which has helped Cabot place among the top handful of market-timing newsletters numerous times.