Why is that?
New BOD
What is the bull case for GOOGL?
Roughly a market multiple now for a far superior business. Moat. Will shrink the float over time
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Is it just that simple? $70B buybacks but how much SBC offsetting “returning cash to shareholders>”?
Alphabet has terrific proven businesses & management. Have owned and added on downturns since 2005 and never sold a share. Who knows where the bottom will be but it sure seems like reasonable price and able to withstand the inflationary and market turbulence to this amateur investor.
PE 20, PEG-0.8, Revenue 270B, EBITDA 96B, P/S 5.5, ROE 30.8%,Cash 134 B, LT Debt/Equity 0.1, Margins 30.5%,FCF 53B, Cap Ex 28B, 24% off its 52 week high, new 70B buyback announcement.
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I’ve been looking at Alphabet. What I would say is that last years earnings were a big jump above trend. If you take the last three years and average them to the current share price it’s still 31 times earnings.
20 x 3 year average would be 1460.
So why is he so overweight? Why does EVERY great investor on Datorama have GOOGL as one of largest positions?
" So why is he so overweight? Why does EVERY great investor on Datorama have GOOGL as one of largest positions?"
so you can post about it perhaps?
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They’re not infallible are they, also piling into Amazon, FB and BABA pre drop (all with more buys than Google in the last 6 months)
My fag packet.
Average eps last three years is $73 per share, conservative earnings growth of 10% pa over the next 10 years equates to $189.34 per share in 10 years, x 20 PER = 3786 per share,current share price 2286 would equate to a 5% return over the next 10 years.
My fag packet.
Average eps last three years is $73 per share, conservative earnings growth of 10% pa over the next 10 years equates to $189.34 per share in 10 years, x 20 PER = 3786 per share,current share price 2286 would equate to a 5%pa return over the next 10 years.
Generally I tend to agree with you but I think you are being much too conservative here. You either discount earnings with some normalized estimate, or you discount growth rates. Doing both seems a bit too conservative. Your earnings growth rate is way below the 20-22% they have been averaging for the last decade. If they grew $75 at the 20% they have been averaging for the past decade they would be earning $185 in five years, with a pe based price target of $3700-4625. This gives us expected returns of between 10-15% per year on these discounted earnings. I think $85 share is more in line with historical net margins of 22%, and the shares rarely trade down to 20 times ttm earnings, so $1700 would be your best bet for a back up the truck target. If you are waiting under $1500 you might end up like me–waiting forever. I missed out in 2020 by $100 because I stuck to my extremely conservative valuation guns, and here I sit missing out on a double even after the recent price collapse. While $2300 is by no means cheap, Google is rarely available at these multiples. I’ve already started my position and will be looking for Mr. Market to offer even better prices in the coming months.
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Fair valuation $73av*10@15% earnings growth = 295x25pe =$7375. Present value *15% discount rate = $1822.
I have a small opening position but one thing I need to understand better is the capex. It’s big. Cloud servers I presume. I need to try and understand their competitive position in cloud computing. (This is why I’m just 90% Berkshire: no idea what I’m doing.)
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What happened to this:
Subject: Alphabet and Berkshire
Author: EVBigMacMeal
Date: 3/7/2022 4:45 PM
Number: 270496 of 270515
I wonder what price Buffett would start buying Alphabet?
I would guess he would be comfortable if it got to 12 to 14 times free cash flow. Would
require considerably more general market pessimism before it would get to those
levels though. Might take Jeremy Grantham’s predictions to come true…
It would be a big liquid stock he could put $50 Billion in. He liked the newspaper and
TV businesses and he likes the Google and YouTube business from public comments.
It would be Buffett’s style to wait until the business is fully entrenched before getting
in. Just waiting for the price. Would be nice to see Alphabet in the portfolio, along side
Apple.
30% net margin
30% ROE
68% ROE excluding cash and investments
2021 profit after tax $76 Billion includes losses from cloud $890 Million and losses
from Other bets $1.45 Billion
. Still growing strongly
What do you reckon is the price Buffett would start buying Alphabet in 2022?
$2,529 current price
$2,000
$1,500*
$1,250
*my guess
Still no table pounding buys from this board at any price?
BRKB?
GOOGL?
#Safety