Update
Google (GOOG)
from $100k Portfolio, chosen as a Top Pick for 2013 at $733 in Investment Digest issue 734, dated January 9, 2013.
Google shares are finally getting the respect they deserve.
On October 17, the company reported a great quarter. The results sent shares soaring 14% in a single trading session. And the stock price topped $1,000 for the first time ever.
The search-engine giant blew past third-quarter earnings estimates, with net income increasing 36% from a year ago. Revenue growth was also very healthy at 12%. Google’s profits have increased every year since the company went public in 2004 — even during the lean years of the Great Recession. The company is continuing to grow at a rapid rate, even as the company grows.
What should really sustain Google shares over the long run is the company’s expanding mobile advertising presence. In July, Google began requiring advertisers to buy mobile ads whenever they buy desktop ads. As a result, ad sales rose 22% last quarter after falling short of 20% growth for four straight quarters. Ad volume also surged, with paid clicks increasing 26% from a year ago. ...
Even at $1,000 per share, Google shares remain fairly priced. The stock today appears to be trading at an appropriate valuation. The upside of the stock is smaller now than it was three years ago. But the growing business should be enough to offer investors another 15% to 20% upside over the next year. ... I’ll continue to hold my position. Google remains one of my favorite ways to invest in the growth of the Internet and mobile — I recommend buying the stock at around $1,000.
Ian Wyatt, $100k Portfolio, www.100kportfolio.com, 866-447-8625, October 28, 2013