Google Stock Analysis – Why Google is a Worthy Stock Pick

Google remains one of the most attractive stocks that long haul investors first think of buying. It is one of the stocks that come into mind when people think about tech stocks at any given time. It has so far risen 45% in 2015 alone even after it made some surgical changes in its financing and operations. Google Inc. (also now trading and operating as Alphabet Inc.) has a search business that is growing diversely and it also commands the most dominant video-streaming platform on the internet through YouTube. These two ventures provide formidable advertising revenues for the company, thereby giving share owners fundamental reasons to hold their investment.

Google has an attractive market capitalization and a rich portfolio of products

Good market capitalization and an excellent portfolio of products is important to the long-term share worth of a listed company. From recent company announcements, Google’s ambition to keep on expanding its advertising and cloud business is good news for the share price. Expanding the cloud business will just lead to more revenues in future financial years. The share traded at an average price of $750 for most of November and at the moment, based on the plans to keep on expanding the cloud business, experts are placing a target price of $900 per share in the near future; all with very commendable buy ratings.

The reorganization of Google Inc. also allows more transparent dealings within the involved business ventures. Transparency of financial information is likely to bring in new investments as people will get new pointers towards the potential of each set of business. For example, off-shoots like Calico, Fiber and Life Sciences will have their information more available to potential shareholders. These businesses enlighten the public that Google ventures in more than just search engines and YouTube. Fiber deals in high-speed internet while Life Sciences deals with innovative medical equipment such as glucose-sensing contact lenses.

Google is a company that is willing to cut off some businesses that bring cost over-runs or losses

One good indication of a stock that is going to stay attractive in the long run is how the underlying company treats some lines of business that are not doing good. After restructuring itself to Alphabet Inc. Google began a period of checks and controls to cut off those businesses that were losing money. Over the years, the investor gets the security and assurance that the holding company will do its best to direct the invested funds into businesses that can actually yield a profit and raise the baseline of the company. In October alone, the restructuring and elimination of the cost overruns helped the shares gain 15%. Other companies that are usually reluctant to reinvent with technological and economic changes have slowly faded off the scene, with Kodak being a good example.

Other fundamental statistics that exempt Google from the list of valuation traps

Some stocks have a good price value but they usually end up trading lower with time. Some readings such as the debt to equity ratio and the current ratio will help an investor have a clear picture of what he is investing in. The debt to equity ratio gives investors an idea of the proportion of debt and equity that has been used to finance company assets. Google’s debt to equity ratio has declined through the years. The figure was 0.0959 in June 2012 but it has been declining in every subsequent quarter to settle at 0.045 in the most recent release of September 30, 2015.

These fundamental and technical reasons have made Google stocks to gain in value through the years. The company is also likely to experience stable stock prices even as economic fluctuations arise in the coming financial years.

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