Alphabet Inc (GOOG)

Likes it very much. Earnings are dramatically understated. They spend a lot of what they earn and don’t return it. This could be the year in which they start to return capital to shareholders. Search will still be able to generate tones of extra cash.

Google (GOOGL-Q) or Baytex Energy (BTE-T)? Completely different animals, but to him Google is one of the great growth stories out there. They haven’t really monetized their Android system. They own “search” on a global basis and have so much power they haven’t monetized. You are getting all of this at basically a market multiple with a great balance sheet. This would be the one that would allow him to sleep at nights over the next couple of years.

This has been an under performer. The trouble is that institutions are going to go where the money goes. Because of this, there is going to be a certain amount of pressure on the stock. Chart indicates that this has broken down through a trend line. Also, the last low at around $530 has been broken through and is now at $520. That is not a good thing. There might be better alternatives.

Internet stocks as a group have underperformed recently due to profit taking. One of the concerns now is how much revenue is out there and available for online advertising. We are seeing money move toward more economically sensitive names. There has been tax loss selling recently. He is still in AAPL, semiconductors, and security software however.

Hasn’t really done very much over the last year. Expectations on the street were fairly high. This company doesn’t give guidance. They are quite independent that way. However, he likes that because he sees a lot of companies giving guidance. If they miss by just a hair, the street reacts very violently; this encourages people to micromanage over short periods. These are long-term assets and have to be viewed that way. Thinks that in 2015 this company is going to do good things. Earnings are probably going to rise in the mid to high 20%s, revenues probably in the 18% range. Trading at less than 20X earnings.

A very impressive company. Preeminent in search and preeminent software for mobile devices with their android software. They are the “go to” for advertisers who want to get their message out on any kind of computing device, including mobile devices. You also get what he calls lottery tickets, with the driverless car or whatever they might be developing. This company has almost $100 per share in cash and trading at probably 19X or so 2015 earnings. If you take away the cash, it is trading more like 15X or 16X. Doesn’t pay a dividend but are sitting on $62 billion, which will be burning a hole in their pocket. Feels they are either going to start to pay a dividend or are going to start to buy back shares.

European regulators are worried about how much market share they have in “search” (60% market share globally). You also have a lot of issues with investors regarding their spending a lot of money on wearables, self driving cars, etc. Keep in mind that they have been growing at 20% a year now for 4 years, and are still anticipated to grow at 20% again next year. Trading at 17X earnings, which is a real deal when compared to the market which is trading at 16X earnings, and trading at a much slower rate. He really likes this company. A lot of trends are going to work in their favour. He plans on re-entering this name whenever he gets some cash.

17-18 percent earnings growth. Android is finally cashing in. Google play will allow them to take part in online gaming. They are at a 52 week baseline.

The leading search engine provider with about an 89% global share. Online advertising is primarily how they generate revenues. Stock has done nothing this year, and is actually down. Part of the problem she thinks is that when you are the big gorilla and you have such a huge share, your share is only going to start to decline over time as more competition comes in, but they haven’t really seen huge competition. Feels there is very strong secular growth in digital advertising and only accounts for 20% of total media spend, and this will increase over time. Google has about 70% share of global internet ad spending. As the whole space grows, they are going to benefit as the overall growth continues.

Sold her holdings because of the valuation, but looking at it recently, it seems to have come back more into line. This is different than the stocks she typically owns, as it is more of a growth stock. They are very well positioned in the advertising space. The whole key is shifting from desktop advertising to mobile advertising. Given its positioning and relatively lower valuation multiple, she wouldn’t be quick to sell it just because of tax loss selling season. Has an attractive entry point.

Has really underperformed this year relative to the sector and relative to the broader market, which really presents a good buying opportunity given that we are still looking at 18%-20% long-term growth. Trading at a fairly decent valuation of 19X forward PE. This gives you a 1.1-1.0 PEG ratio, which is cheaper than 85% of the S&P 500. As the US, and hopefully the global, economies rebound, this should benefit from greater demand for Internet search engine and advertising which is its bread-and-butter.

Technology tends to run in the last quarter of the year, October all the way through to January. This is really no different and will tend to show the same seasonal tendencies. However this has not shown the positive seasonal tendencies that are typical at this time of year. It has been underperforming the sector and underperforming the market. The trend is down with lower highs and lower lows.

Kind of warming up to this. He keeps looking at the valuation which is attractive. Trading at $540 with $75 a share net in cash. Probably by this time next year, they will have $85-$90 a share net in cash and close to earning $30. 14 or 15 times net cash is not a lot to pay for a wonderful company. This company has probably one of the biggest moats in the world and a very, very long runway of growth with advertising online, and are now monetizing YouTube. Interesting and exciting to him.

They have a monopoly on search. That is key. Everybody uses them. Advertising revenue coming off of it is substantial. If you have a long term view then this is a company that is going to execute well. You are not paying a lot for them like social media type companies.

Has owned this for quite some time. A wonderfully innovative company. 80% of all cell phones operate on their system. Has a great balance sheet. Visionary leadership that doesn't pay themselves a penny. They are able to attract outstanding talent. A lot of the things that they are working on, like autonomous driven cars, are coming to fruition. These are the kind of guys that are making things happen. They are creating the demand. The YouTube site has not been really monetized as much as it probably could be. Trading at about 18X forward earnings. For company this size, growing this well, with that many opportunities, and a dominant position in so many industries, it is incredibly good value.