Google (GOOG) is trading at $345 a share as I write this – down 54% from its high of $747 last November. That gives it a market cap of about $110 billion. Subtract the $14 billion in cash and investments on its balance sheet – they have no debt – and you can pick up Google for $96 billion.
Over the last 4 quarters, Google’s net income is $5.6 billion. That’s a 17 trailing P/E – and Google is growing fast. Conservatively assuming 20% growth over the next 4 quarters, and they’re growing 30% right now, we’re talking about a 14 multiple on their next 4 quarters net income. 14! Come on! Are you serious?
Google is a steal at these levels. That’s real money they are making. I’m not even worried about them. Buy it.
Disclosure: Top Gun is long shares of Google (GOOG).