My stock analysis is that what makes Google an excellent company is its strategy to improve its business and expand into non-traditional areas, including its “Android”-based “Nexus” mobile smartphone, and the licensing out of its Android platform. Already, Google’s Android mobile operating system is tops. As far as mobile applications, Android apps will account for about 58% of all downloads this year, versus 33% for “iOS” by Apple Inc. (NASDAQ:AAPL), according to ABI Research. (Source: Perez, S., March 4, 2013, “ABI: With 58% Market Share, Android Will Top iOS In Smartphone App Downloads This Year, But Apple Will Win On Tablets,” TechCrunch March 4, 2013.)
And to compete against Amazon.com Inc. (NASDAQ:AMZN), Google is testing out its “Google Shopping Express” service that will ship out products on the same day.
Even with the $800.00 price tag, my stock analysis is that Google has a better chance of reaching $1,000 than Apple. The chart of Google shows the upward trending channel and strong relative strength. You also need to be careful, as the stock could retrench, which could signal a buy based on my technical analysis.
Chart courtesy of www.StockCharts.com
Knowing what I have learned over the past eight years, I wish I had picked up some shares of Google, but then there will always be opportunities available based on my stock analysis.
I look at Facebook with the same reasoning. Could this be the next Google in the Internet space? At below $30.00 a share, it sure is tempting, but the valuation is too expensive at this time compared to Google. Now, if Facebook can really grow its mobile advertising business, I may then consider the stock a contrarian pick, but not for the time being.
In the case of Google, a $800.00-plus stock is not cheap; but based on a valuation and comparative basis, Google still is tops, according to my stock analysis.
In my stock analysis, Google will continue to dominate and gain market share in the Internet space, including its Android-powered “Nexus” smartphones and Internet Wi-Fi offering.
And despite the higher stock price, my stock analysis shows that the stock continues to attract institutional buying, unlike many of the other major technology companies. Institutional investors purchased 220,152 shares over the past quarter-to-quarter period, which represents a 0.08% rise in institutional ownership based on information from Thomson Financial. By comparison, institutional investors have sold 4.83 million shares of Apple over the same period.
If you are eyeing Google, my stock analysis tells me that you can wait for weakness to enter, as this has been the recent pattern. Alternatively, my stock analysis indicates that you can also buy call options as a risk-controlled trade.
Please be advised that Google should not be construed as a buy recommendation, but simply as a potential investment opportunity. I also like Nokia for speculators. (Read “Why Nokia Could Be a Moneymaking Investment.”)
Related: PowerShares QQQ Trust, Series 1 (NASDAQ:QQQ).