Alphabet Inc (GOOG)

(A Top Pick May 13/16. Up 18%.) This is 6% of his portfolio and will remain his biggest holding. There’s $200 billion of advertising that is going to move from old media, mainly TV, to the Internet over the next few years. This is not that expensive. This is still a Buy.

As the largest search engine, it garners a lot of the digital online advertising. She can see very good secular growth in digital advertising. Corporate advertising budgets have about 35% allocated to digital, and sees that increasing over time. They will garner a big share of that because it is the leading search engine. This is not a value stock, but more of a GARP stock, trading at about a 25 forward PE. Has consistently grown its revenue in excess of 25% organically, and a lot of that is falling to the bottom line. Earnings are also growing at a 25% clip. (Analysts’ price target is $1000.)

Last year it was F.A.N.G. Huge market cap and huge performance. After a stellar year you assume you would flat line. But GOOGL-Q has keep on charging ahead. It is surfacing again in an evolved fashion. They have the cash flow, the growth and they know how to monetize. They are not just search. They have translate, music, etc. Services are a small but growing stream. Technically it is working and in a great sector. Mid to high teen levels of growth.

(A Top Pick Feb 24/16. Up 17%.) This still looks pretty decent in terms of valuation. Trading at 20X forward earnings with a 17% long-term growth rate, giving it a 1.2X PEG ratio. In technology, this looks pretty cheap. Thinks they will continue to do well with mobile ad sales and YouTube sales. Cost controls are also helping them.

One of the cheaper top growth tech names in the US. The management team should come up with some new products at some point.

He likes this, and doesn’t find it terribly expensive in terms of the multiple it is trading at, versus their growth. However, his preference would be Facebook (FB-Q). (See Top Picks.)

Apple (AAPL-Q) or Alphabet (GOOGL-Q)? He owns both, and both are great holdings.

The only reason he doesn’t own this is that it doesn’t pay a dividend, which is part of his strategy. If you look at share price over the last 10 years, you could essentially have bought it at any point, and seen a nice return over a few years. They are leading in their industry, continuing to innovate and have lots of cash.

He loves this as a long-term hold. A really solid company. A disruptor in a good way. It has been very, very consistent over the years. Always investing in new ideas.

Alphabet (A) or Alphabet (C)? There is really no difference between these. This one is going to give you more voting rights and is slightly more expensive. He prefers GOOG-Q because it is such a big company, he can’t imagine his votes are going to make a difference.

Trading at an all-time high, and the only advantage of buying it now is that the Cdn$ is slightly stronger now than a year ago. These companies are onto a big, big trend. 1.5% or a 2% starting position is not a bad idea.

(Top Pick Feb 9/16, Up 20.76%) She still likes it. It has lagged the rally, only up at 4% vs. the market being up 10%. It is the 28th consecutive quarter of organic growth over 20% year over year. That trend of digital advertising is going to continue to grow as only about 35% of advertising budgets are allocated to it. They got a new CFO a couple of years ago who has brought a lot of financial discipline to the company so more growth is dropping to the bottom line. They have been buying back stock even though they don’t yet pay a dividend. They have a lot of cash off shore so policy changes in repatriation of cash will benefit them.

Apple (AAPL-Q) or Alphabet (GOOGL-Q)? He owns both, although he has a bigger position in this one and thinks of it as a better business. If you strip out their cash, it is only trading at 17 or 18 times earnings.

(A Top Pick Feb 18/16. Up 17.92%.) Technology has been a theme for him all year. This continues to perform really, really well. At that time, the biggest things were the things that were working best. Over the course of the year, he has moved to include mid and smaller cap securities.

He is concerned about valuation here. But they are a great company. In a market correction it could come down more than the market. $740-750 would be a buying range.