Google Hits New All-Time High

Last month I wrote that the risk-reward in shares of Google (GOOG) looked extremely favorable. It just so happened that the stock bottomed two days later and has soared 57 points since. Technicians will likely be pleased to see that Google hit a new all-time high on Tuesday, breaking through a previous double-top.

Hopefully some readers took advantage of Google trading in the low 460’s. If you did, where to from here? Well, I have not sold any of the positions I initiated when I wrote the last article. I think a P/E of 30 is very reasonable given Google’s growth prospects. With 2008 earnings estimates north of $19 for the company, there is no reason to doubt that a price objective of $575-$580 is attainable in the intermediate term.

Full Disclosure: Long shares of Google at the time of writing

Enjoy this post? Subscribe and never miss another one: RSS | Email | Twitter

2 Thoughts on “Google Hits New All-Time High

  1. Anonymous on June 7, 2007 at 9:22 AM said:

    Yeah, GOOG is up some 13% or so, about the same as KFT is up since you bashed it a couple of months ago saying it was not a good buy.

    KFT has very little growth but you are missing the margin expansion story. The company has been passing price increases and raw material inflation (especially milk and eggs) is apparently subsiding.

    Trust me, you will actually gain more credibility with your readers if you admit your mistakes.

  2. Chad Brand on June 7, 2007 at 9:45 AM said:

    Well, I didn’t send out a mass bulletin telling everyone that Kraft went up 3 bucks after I wrote that I didn’t think it was a good value, but I’m not sure that means that I don’t admit my mistakes.

    I’ll be wrong plenty of times, and given that I publish my opinions online quite frequently, everyone is more than welcome to read through and see my track record.

    My opinions are just that, opinions, and of course I won’t be right all the time, nobody is. I wrote that I didn’t think that Kraft was a good value. I stand by that opinion. It trades at 18 times 2008 earnings and is growing low to mid single digits. To me, that’s not a value and I would expect it to underperform over the long term because of that.

    I guess you want me to write a post that says what I just said, but I don’t see how that has any value. Nothing has changed with Kraft fundamentally since April, and my opinion hasn’t changed either. Hence, I have had no reason to write a follow-up post about the company.

    Perhaps I could keep track of my picks on the site so everyone could see what mistakes I have made. That might be an idea worth considering. Would that be something you might suggest I do in the future?

Post Navigation