This is the third in a series of articles where I will cover popular and/or high profile stocks. The primary objective of this series will be to put a spotlight on the importance of forecasting future growth prior to making an investment decision. I elaborated on the importance of forecasting future growth in part 1 of this series found here. The central idea is to determine whether or not a reasonable forecast of future growth warrants consideration for investment relative to how the market is currently valuing a given stock.
Furthermore, I believe it’s imperative for long-term success that investors apply their best efforts towards determining the intrinsic value of any stock they are interested in. This is especially true for long-term oriented investors. If you overpay for even a great business, you are very likely to be disappointed with your long-term results.
Although most every reader is familiar with Google (Alphabet) the following long business description summarizes the scope of the company:
“Alphabet Inc., through its subsidiaries, provides online advertising services.
The company operates through Google and Other Bets segments.
This segment includes the company’s primary Internet products, such as Search, Ads, Commerce, Maps, YouTube, Google Cloud, Android, Chrome, and Google Play, as well as its hardware initiatives. The company’s technical infrastructure and efforts, such as virtual reality are also included in Google. Google primarily focuses on advertising, the sales of digital content, apps and cloud offerings, and sales of hardware products.
This segment includes businesses, such as Access, Calico, CapitalG, GV, Nest, Verily, Waymo, and X. Other Bets also engages in the sales of Internet and TV services through Google Fiber, sales of Nest products and services, and licensing and R and D services through Verily.