Google Is Ridiculous Cheap Here – Another Example Of The Opportunities Available Now

October 8, 2008 at 10:13 am  ·  Category: Fundamental Analysis, Stocks

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.

Again, the same kind of analysis could be done for any number of other companies.  This is when you buy.  This is capitulation.

Disclosure: Top Gun is long shares of Google (GOOG).

Posted by Greg Feirman  ·  Trackback URL  ·  Link
 

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