Alphabet Inc (GOOG)

GOOGL-Q is a core holding. It is doing better than it had been because they are not spending as much money as they had. They have three things going. They are closing the gap between ads they can sell on desktops vs. mobile. Their expense growth is continuing to moderate and they are seeing increasing business from Googleplay and YouTube. 21 times earnings and bottom line growth of 17%.

His model price on this is $557, 21% lower than the existing price. His program is calling for it to be $806 next year.

The value of Google goes up and up and up. You can put it away and forget about it. This is a hard stock to trade but an easy stock to own.

Valuation looks very attractive relative to other growth oriented technology companies. Trading at 21X forward earnings with a 16% long-term growth rate. Has a 1.3X PEG ratio, which is very cheap in the S&P 500. They control 73% of the search engine space in the US, and over 50% of the global search ad revenue. Those things are going to grow organically. The new CFO is doing a lot of great things to help with transparency. Down 9%-10% year to date, which is a pretty good buying opportunity.

Google is responsible for 64% of all searches done on the Internet. As traffic grows on the Internet they continue to benefit. They are in the middle of the shift in the spending in media and are getting the lion’s share of the revenue for advertizing. Its revenue is accelerating and their margins are improving. They own YouTube. He likes defense companies because you never really know what ELSE is in there that can come out and generate revenue later. Google is the greatest brain child. It has pulled back 10% but is firmly in an uptrend.

The company has not been around long enough to give a seasonality assessment. However, the technicals look reasonably good. The chart shows that it is in an upward trend and is outperforming the market. In the last couple of weeks it has had a bit of a difficult time, but the scenario is quite positive on a technical basis. Watch the technicals very, very closely. If they show signs of rolling over, that will be an opportunity to take some profits.

(A Top Pick March 10/15. Up 26.26%.) Loves the company. Reported excellent earnings. This is one of the juggernauts that you just have to continue to own.

This had a big pull back to $700. Reported a great quarter last week. This is the biggest online search company, and online advertising is a secular growth industry. Thinks it still only represents about 30% of the overall ad-spend when a company looks at their advertising budget, and it should increase over time. With this company’s dominance in search, they will get a larger share of that advertising budget. Thinks earnings can grow in the 18%-20% range for the next few years. Trading at a 20X multiple, and a 1.5 PEG ratio.

Feb 1 is earnings date. It is the first time we get enhanced disclosure. When companies enhance their disclosure, there is a bit of a coming clean and it possibly costs more than people think, but then there is the core business coming clean. You end up seeing a better trajectory for earnings growth. Near term there is some room for an uplift.

(Top Pick Feb 19/15, Up 29.30%) He is still happy with it. It has done very well since the new CFO came in. Facebook keeps stealing advertising revenue from them. They are getting great traction out of YouTube, though.

It is probably one of the best companies in the world, investing in future growth and they have a lot of future investment in the company. It should be great for the next decade. Are they moving away from core competencies with the car and glasses? You want to buy these stocks on pullbacks.

Technology is very attractive as a sector to look at, namely new technology. Valuation is not compelling. It is expensive, but overall it is a good name. This is one to keep an eye on and pick your spot.

(A Top Pick Dec 4/14. Up 34.8%.) Still likes this. Trading at about 25X earnings with a very high double digit growth rate. A 1.4X Peg ratio, which is pretty cheap for a world class name like this. Still sees very good growth and monetization in their mobile and video segment. The new CFO is doing a great job. Probably not a bad spot to start picking away.

(A Top Pick Jan 13/15. Up 47.45%.) Bought this when the stock had not been doing anything. Now they have a new CFO who is a bit more investor friendly. Have started to post good earnings, and she is expecting high double digit earnings. Also, the multiple has expanded. She is waiting for more of a pullback before adding more for new clients. This is the leading search engine which means they are going to attract advertising dollars. Online advertising as a percentage of advertising budgets is still only about 25%-30% of the overall budget, so that can continue to increase shares.

(A Top Pick Jan 9/15. Up 52.45%.) One of the few superstars in the US market last year. This still looks in play. The drive in the market is still technology, which is where the growth has been.