Alphabet Inc (GOOG)

Technically this stock has been range bound and consolidating. Numbers have been decent, not exceptional. When he looks at the Internet space, there are a whole bunch of companies that are beating and exceeding expectations with estimate revisions going higher. If this broke about $580, technically it would look more attractive. It is sort of stuck in neutral, and he would wait to see it get in gear before he put money into it.

(A Top Pick April 14/14. Up 0.27%.) Dealing with some competitive threats. There has been the consistent drop in cost per click they are receiving and have done the best they can to mitigate that. The competition of Spacebook has done an exceptionally good job. Google is making a lot of investments behind the scenes that we don’t even know about. Great balance sheet and exceptionally profitable.

Trading at 13X ex-cash earnings next year, and is a pretty cheap price for a company that is growing twice or 3 times as fast as a regular S&P 500 company. What he doesn’t like is that they keep issuing a lot of options and not doing anything with the growing cash base. He would like to see them start buying back stock or start a dividend. (See Top Picks.)

(A Top Pick March 19/14. Down 1.15%.) Very innovative company, but going through a “low” in terms of monetization of new products. They are putting in huge amounts of CapX into new developments. It continues to grow fundamentally at a much better rate than the price might indicate which leads the valuations to come down. This is a solid 15% grower which represents a really good value.

He likes this business in terms of the scale that it has available to it. Technically speaking, its revenue generation is just advertising. A very well-run, highly technological, well diversified advertising business. The amount of information it has is a huge asset for anybody else who wants to tap into smart marketing.

(A Top Pick April 14/14. Up 2.84%.) Their profits have grown and the company is cheaper than it was a year ago. They’ve advanced some other technologies that much more. They still have the dominant operating system in Android. Innovative company and a strong, strong balance sheet. Very reasonable valuation metrics at 16X forward earnings, which is a big discount to the market.

Revenues and earnings continue to decline. Highly dependent on the search and advertising business, but are expanding and diversifying within that space. Putting a lot of money into R&D. If it wasn’t for that, their earnings would be even more powerful than they are today. He likes this long-term.

One of the best business plans in the world. Advertising is all about a push business. If you want to advertise, you have to spend lots of money, and hopefully people will see it. On the other hand, if people want to look you up, all they have to do is Google you. This is the greatest advertising business model in the world. They make about 95% margin selling keywords. They are using the cash flow to make bets in other areas, which have huge markets such as networking, cable, Google glass, YouTube, etc. They are really under-reporting their earnings because they are investing so much in CapX and R&D. Their earnings would be a lot higher if they weren’t doing that. There is potential for them to start a dividend as well as share buyback.

This looks fine. Chart shows a long uptrend from 2012, followed by a correction in 2014. This formed an ABC formation. What is bullish is that the corrected period didn’t make a new low. He thinks this works higher and takes out the old highs.

Last year this was a sort of underperformer, but the company’s earnings have continued to grow. Trading at about 16X forward earnings. Still lots of growth ahead of it.

The majority of it is about search and it is going to continue to grow. It trades at a market multiple or less.

They have the dominant share in search and online advertising. Have invested a tremendous amount of money in the business. $35 billion in CapX and acquisitions over the last 3 years, and he is not sure that he can see the benefit of that. EBITDA margins have come down over the last few years as the business mix is shifting. The momentum behind desktop search is slowing somewhat. It is more the mobile search and mobile advertising that has the advantage.

Just buy it and put it away. The market is undervaluing their assets. Their acquisitions have been smart. 18 times earnings and generating cash.

This or an ETF in technology? This is a wonderful company. The concern right now is that there is some competition in their core space in search/advertising. There may be better alternatives. For an ETF, you might want to look at a broad-based one such as the Guggenheim E. W. Technology (RYT-N) or SPDR Technology (XLK-N). Also, don’t forget about Apple (AAPL-Q) which is in the midst of a great product cycle and is not expensive.

Stock is starting to respond a lot in the last little while. With this one you are paying 20X earnings with a 20% growth rate. This is a massive company and they are monetizing. Making money in the U2 space and are making many acquisitions that will benefit their bottom line. Longer-term, this is one of the better tech names to own.