Alphabet Inc (GOOG)

(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.

90% of their revenues come from online advertising. They are the leading search engine globally. The stock did nothing in 2014 and the valuation came down. Trading at about 17-18 times forward earnings, very much in line with where she sees their earnings going over the next 2-3 years. There is still a lot of room for online advertising to grow.

This correction that the stock has had gives you an opportunity to get a high-quality growth stock. He looks at this as an opportunity to at least get positions started on a stock that has been a long-term winner for a very long time.

There was a gap back in 2013. The level you would want to be concerned with would be at around $502-$490. If it breaks down there, the chart not only shows a double top, but the whole thing through 2014 becomes a sort of orphan space. Once it starts to come into the gap at around $480, it is probably going to be a bit volatile. If you have a long-term horizon, such as 10 years, this might be a real good investment for you.