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JimVanMeerten (62.38)

Why is Google so popular?

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August 11, 2011 – Comments (0) | RELATED TICKERS: GOOGL

This is the second article is a series of stocks that have the highest general investor interest as measured by the number of Motley Fool readers who express an opinion on a stock.  Today Google (GOOG) comes in second only to Apple (AAPL) with 16,927 readers expressing an opinion; which happens to be that 85% of those readers think the stock will out perform the market.  The price momentum on theBarchart price chart confirms their prediction.


Google Inc. (GOOG) maintains an index of Web sites and other online content for users, advertisers, and Google network members and other content providers. It offers AdWords, an auction-based advertising program; AdSense program, which enables Web sites that are part of the Google Network to deliver ads from its AdWords advertisers; Google Display, a display advertising network that comprises the videos, text, images, and other interactive ads; DoubleClick Ad Exchange, a real-time auction marketplace for the trading of display ad space; and YouTube that provides video, interactive, and other ad formats for advertisers. The company also provides Google Mobile that optimizes Google’s applications for mobile devices in browser and downloadable form; and enables advertisers to run search ad campaigns on mobile devices, as well as Google Local that provides local information on the Web; and Google Boost for small businesses to participate in the ads auction. In addition, it offers Android, an open source mobile software platform; Google Chrome OS, an open source operating system; Google Chrome, a Web browser; Google TV, a platform for the consumers to use the television and the Internet on a single screen; and Google Books platform to discover, search, and consume content from printed books online. Further, the company provides Google Apps, a cloud computing suite of message and collaboration tools, which includes Gmail, Google Docs, Google Calendar, and Google Sites; Google Search Appliance that offers real-time search of business and intranet applications, and public Web sites; Google Site Search, a custom search engine; Google Commerce Search for online retail enterprises; Google Checkout to make online shopping and payments streamlined and secure; Google Maps Application Programming Interface; and Google Earth Enterprise, a firewall software solution for imagery and data visualization. Google Inc. was founded in 1998 and is headquartered in Mountain View, California. (Yahoo Finance)

Barchart technical indicators:

1 - 80% Barchart overall technical buy signal

2 - Trend Spotter technical buy signal

3 - Trades above its 20, 50 and 100 day moving average

4 - 14 new highs and up 30.51% in the last month

5 - Relative Strength Index is 75.57 and rising

6 - Trades around 619.64 which is above its 50 day moving average of 527.66

Fundamental factors:

1 - Wall Street brokerage analysts consider this a core holding for growth portfolios

2 - Analysts have issued 13 strong buy, 20 buy, 5 hold and no negative recommendations to their clients

3 - Sales are projected to increase by 30.30% this year and another 22.20% next year

4 - Earnings are estimated to increase by 19.70% this year, followed by another 18.10% next year and continue by 18.86% annually for at least the next 5 years

5 - The stock is trading slightly below its 12 month trailing P/E ratio at about 92% of its past P/E trading range

6 - This company is one of the few that says it will add headcount next year and has a 6,000 employee increase projected

General investor sentiment:

1 - The 16,927 Motley Fool readers that expressed an opinion had 85% vote that the stock will beat the market3,480 of the more experienced

2 - All Stars are slightly more positive with 90% voting that the stock will out perform the marketThe Wall Street analysts Fool follow vote 46 to 0 that the stock will beat the market

Summary: Google's (GOOG) double digit increases in sales and earnings are a great sign.  The announcement of 6,000 additional employees is a bright spot in this economy.  Investors could see a 23% increase +/- 4% annually over the next 5 years.


Jim Van Meerten is a Marketocracy Master

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