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Google Share Price {GOOG} Technical & Fundamental Report -May 2013

Nasdaq is on the move and Google is one of the most interesting listings on Nasdaq. Google is the global leader in web-advertising industry and one of the most innovative large firms in the world. Google’s current P/E ratio at 25.6 may be considered as normal, given the high annual expected earnings growth, for the next five years (12% annual expected growth on average). As concerns Google share price, currently it is moving in a nice long-term bullish trend that we are going to investigate below. But first we are going to evaluate our previous signal on GBP/USD.

Previous Signal on GBP/USD


As concern our previous signal on the Forex pair GBP/USD, a bullish short trend was forecasted on GBP/USD which was trading by that time at 1.5473. After about 10 days GBP/USD is trading at 1.5510. It has given two uptrend moves, above 1.56 (1.5610 in May 1st and 1.5618 in May 3rd), but it seems that it hasn’t shown the power of demand that it was expected. The current technical outlook of GBP/USD may be considered now as neutral, and during next days it is expected to trade according to major fundamental developments and news.

»Forex Trading Signals: GBP/USD

Google {GOOG} at a glance

Here are Google’s Key Figures

GOOGLE PRICE

FUNDAMENTALS

Last Close:

$ 857.23

Shares Outstanding

331.77 Million

52 Week High:

$ 861.85

Market Value (capitalization)

$ 284.4 Billion

52 Week Low:

$ 556.52

Earnings Per Share (EPS)

$ 33.51

Beta

0.97

P/E Ratio:

25.58

Google Share Price Trend

The master trend for Google’s share is definitely bullish and strong. Before this bull rally ends we are going probably to see Google’s price to $900 or even $1,000. But given the beta ratio of 0.97, Google’s trading is in high correlation with the movement of the Nasdaq Index. Therefore, we should expect fluctuations according to the overall market trend, which currently is strong and bullish too.

»Here is a recent analysis on Nasdaq

Chart: Google’s Share Closing Prices (2004-20013) and TCI Long

TCI Analysis

The current price of TCI at +11% is not indicating that the share price of Google is overbought. If we take a look at past peaks of Google’s price we are going to conclude that TCI peaks above +20% or even sometimes to above +30%. In that sense TCI indicates that the price of Google can continue its current uptrend.

Chart: TCI Indicator on Google

Using our TCI technical analysis model, some crucial dates for short-traders are indicated. These dates are corresponding to short-term possible price peaks:

  • +3 Trading Days or May, 10 2013
  • +9 Trading Days or May, 20 2013
  • +17 Trading Days or May, 30 2013

Google’s TCI Data Table

Date

Close

Volume

TCI

TCI Long

4/10/2013

790.18

1978600

0.44

25.04

4/11/2013

790.39

2028700

-0.76

25.98

4/12/2013

790.05

1636700

-0.31

24.76

4/15/2013

781.93

2453100

-3.17

24.52

4/16/2013

793.37

1742000

-4.10

28.46

4/17/2013

782.56

2037000

-8.27

25.08

4/18/2013

765.91

3322500

-9.93

22.72

4/19/2013

799.87

5803200

-3.71

30.18

4/22/2013

800.11

2883400

-2.40

32.01

4/23/2013

807.9

2292300

-1.74

33.13

4/24/2013

813.45

1829100

-0.11

34.93

4/25/2013

809.1

1992200

-0.59

32.22

4/26/2013

801.42

2487700

-1.09

28.15

4/29/2013

819.06

2300800

3.06

37.03

4/30/2013

824.57

2306700

4.68

42.00

5/1/2013

820.43

1455000

3.91

41.37

5/2/2013

829.61

2018300

4.93

43.23

5/3/2013

845.72

2512600

8.06

48.41

5/6/2013

861.55

2141300

11.07

52.63

5/7/2013

857.23

2141300

11.06

51.32

Forecast Starts

 

 

10.53

50.82

 

 

 

11.92

48.99

FirstPeak (+3 days)

 

 

13.62

47.78

 

 

 

12.31

47.65

 

 

 

10.39

49.88

 

 

 

11.38

50.19

 

 

 

13.20

49.24

 

 

 

14.54

48.77

SecondPeak (+9 days)

 

 

15.47

51.97

 

 

 

15.21

49.41

 

 

 

12.84

47.90

 

 

 

12.58

48.48

 

 

 

12.31

47.67

 

 

 

13.98

49.77

 

 

 

12.09

50.07

 

 

 

13.70

48.60

ThirdPeak (+17 days)

 

 

16.82

44.75

 

 

 

10.51

46.73

 

 

 

9.15

52.72

 

 

 

8.18

49.42

 

 

 

7.44

52.27

 

 

 

8.34

49.82

 

 

 

9.38

51.06

Source: TradingCenter.org

Google Basic Strategic Analysis

Web Advertising Domination

Google was incorporated as a privately held company back in 1998. Since then it has achieve a tremendous growth plus it has managed to become the market leader in the global web advertising industry. Google runs today more than 1 million web-servers in data centers. It operates currently 8 data centers (US, Belgium and Finland) and in the future it plans to add 3 more data centers in Asia (Taiwan, Singapore, and Hong Kong).

Google’s Plans

Google now is focusing on many projects like Google Glass and the next generation of the Nexus Tablet. We must mention also Google’s mobile operating system (Android) which proved a great success. Of course, not every project went well. For example the project Google Books which faced copyright issues that were transformed to lawsuits and that will probably end by disturbing Google’s future cash-flows (average impact).

Google’s Greatest Threats

Currently Google’s greatest threat is called Samsung. This Asian giant has dominated the Android smartphone industry and Google now fears that it will develop its own mobile operation system, competitive to Android. Competition in other industries that Google is involved like web-advertising is also very intense but the fact that the web market is expanding in fast pace reduces the impact of competition incurred within. Google is the leader in global web-advertising and it will remain the leader. Why? Because it is miles ahead from competition as concerns its search engine. Google search is the best internet search tool in the world and it gets better and better, that guarantees the future value of Google Advertising Income.

In the following table there is a comparison of Google’s key figures with other web giants.

Compare Google with other Web Giants

 COMPARE

Google

Apple

Microsoft

Facebook

Baidu (China)

LinkedIn

Market Value (Billions USD)

284

431

278

65

24

16

Current P/E

25.58

10.95

17.08

(-)

18.45

516.00

Forward P/E

22.26

11.52

12.27

73 .00

17.39

632.00

Beta

0.97

1.18

0.74

0.63

1.26

1.79

Source: Nasdaq.com

In terms of Earnings per share and P/E, Microsoft and Apple are the cheapest shares in the above comparison. Companies like Linkedin and Facebook are expensive in terms of P/Es because the market forecasts that these companies will grow fast but also that they will probably become the target of future acquisitions. Google’s P/E can be seen as normal (25.6) given the high EPS growth expectations for the next five years.

Google’s Annual Balance Sheet

 INCOME DATA

2008

2009

2010

2011

2012

TOTAL NUMBERS

 

(In Millions USD)

Revenues

 

21,796

 

23,651

 

29,321

 

37,905

 

50,175

Income from operations

 

6,632

 

8,312

 

10,381

 

11,742

 

12,760

Net income

 

4,227

 

6,520

 

8,505

 

9,737

 

10,737

Net income per share

 

$13.31

 

$20.41

 

$26.31

 

$29.76

 

$32.31

 

                 

 BALANCE SHEET

2008

2009

2010

2011

2012

 

(In Millions USD)

Cash, securities and cash equivalents

 

15,846

 

24,485

 

34,975

 

44,626

 

48,088

Assets

 

31,768

 

40,497

 

57,851

 

72,574

 

93,798

Long-term liabilities

 

1,227

 

1,746

 

1,614

 

5,516

 

7,746

Stockholders’ equity

 

28,239

 

36,004

 

46,241

 

58,145

 

71,715


 Giorgos Protonotarios,

for TradingCenter (7th-8th of May 2013)

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