Nasdaq is on the move and Google is one of the most interesting listings on Nasdaq. Google is the global leader in the 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.
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.
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 High Low Close Volume TCI TCI Long 4/10/2013 792.35 776 790.18 1978600 0.44 25.04 4/11/2013 793.1 784.06 790.39 2028700 -0.76 25.98 4/12/2013 792.1 782.93 790.05 1636700 -0.31 24.76 4/15/2013 797 777.02 781.93 2453100 -3.17 24.52 4/16/2013 796 783.92 793.37 1742000 -4.10 28.46 4/17/2013 790.84 778.1 782.56 2037000 -8.27 25.08 4/18/2013 785.8 761.26 765.91 3322500 -9.93 22.72 4/19/2013 803.44 766.26 799.87 5803200 -3.71 30.18 4/22/2013 803.96 775 800.11 2883400 -2.40 32.01 4/23/2013 815.5 800.36 807.9 2292300 -1.74 33.13 4/24/2013 818 808 813.45 1829100 -0.11 34.93 4/25/2013 816.47 807.63 809.1 1992200 -0.59 32.22 4/26/2013 807.74 796.58 801.42 2487700 -1.09 28.15 4/29/2013 822.7 803 819.06 2300800 3.06 37.03 4/30/2013 827.64 817.68 824.57 2306700 4.68 42.00 5/1/2013 824.72 816.36 820.43 1455000 3.91 41.37 5/2/2013 834.55 819.05 829.61 2018300 4.93 43.23 5/3/2013 846.8 836 845.72 2512600 8.06 48.41 5/6/2013 861.85 848.26 861.55 2141300 11.07 52.63 5/7/2013 863.87 850.67 857.23 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 achieved 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 operating system, competitive to Android. Competition in other industries that Google is involved is 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 |
|
Apple |
Microsoft |
|
Baidu (China) |
|
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 merging & 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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