GOOG Google Inc.
Dec 31, 2009
Everyone should be familiar with Google. It has become a verb of common usage in many languages. To hear someone say I “Googled” you yesterday is becoming fairly common vernacular. The Slave Lucrum Portfolio slowly started buying GOOG in August of 09 at the 448 range. The catalyst for my decision was the financial strength of the company, my personal satisfaction with many of the Google Apps such as G Earth, You Tune, G Desktop, and the Google Search Home Page customization. BUT, (Behold the Underlying Truth), while I knew that Google had the lion share of the media based pay for play search income, I always thought that Microsoft and Yahoo would pull some kind of a coup to deflate the rich PE value of GOOG. (Hovering around 50 at this writing). When the announcement of a partnership between MS and Yahoo was made, I expected the stock to take a hit. In researching the MS Yahoo deal, it became apparent that Balmer had paid way too much for a ball of yarn that will take several years to figure out. That is when this portfolio started picking up shares. As of this date, Dec 31, 2009 the stock is trading near its 52 week high of 625 making a forward looking PE of 27. Can it keep up this pace of revenue and profit? There are high hopes on the mobile phone market for GOOG. The Droid is getting mixed reviews but leaning toward positive comments. Of course iPhone will be the one to chase. Ad revenues should continue to do well as corporate media spends shift more toward on line presence where results are measurable and more effective. Currently GOOG accounts for about 9% of the Salve Lucrum Portfolio and is enjoying a 24% unrealized gain. I am looking for 700 by mid year 2010, but could see this being a 1000 dollar stock in two years. That does not mean I am not protecting current gains with well managed stops.