Google (GOOG): The Safest Stock In The World?
August 10, 2007 by Douglas A. McIntyreShares in Google (GOOG) are at $515, up about 18% this year. Some other internet companies are up much more. Chinese search leader Baidu (BIDU), a genuinely tiny company, is up 78%. It trades at a much higher market cap to sales ratio than Google does. Amazon (AMZN) shares are up 90%. It has proved that it is can grow fast and contain costs, but, that increase is a big jump.
In a tough market or a tough economy, Google may be the place to be The company has almost $13 billion in cash and marketable securities. It had operating income of $1.1 billion last quarter. Revenue rose 58% to $3.87 billion.
The bear case against Google is that search advertising is going to begin to slow. It will at some point. But, over the next couple of quarters, most Wall St. analysts believe that it will continues it rapid expansion.
Because search advertising comes from tens of thousands of marketers, Google is not overly exposed to any one sector of the economy. And, almost half its revenue is from overseas.
Car companies, airlines, banks, hardware companies, big oil, retail, and even telecom might get hit if the market moves down.
Google may dodge that bullet.
Douglas A. McIntyre
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