Google below $300 for the first time since '05 -- time to buy?
Answers
2172 points
ChaosNantuko answered 8 months ago …
Google is currently in the middle of a strong, consistent downtrend, and so from a technical analysis standpoint, i would say not yet.
From a fundamental standpoint though, I'm liking their position. Analyst estimates have their 5 year earnings growth pegged at 21% annually. Assuming they warrant a P/E ratio of 20 at that point in time, they should find themselves at around 950$ per share 5 years from now. If thats discounted at a rate of 12% per year, that would make googles true value... about $500.
I think theres a strong chance they grow faster then 21%, but there is also a strong chance they grow more slowly. Using the same method, but assuming they have a P/E ratio of 16 at that time, and only 14% growth, the true value would be around $300. (remember thats discounted at 12% per year, meaning you'd still make 12% annually if those assumptions prove correct).
Remember though that when investing for the long term, you want to buy a stock at a heavy discount to its intrinsic value. If its worth $300-$500, as the numbers seem to be saying, you really don't want to buy it for more then $150.
I would buy google if it went below 150, or if it resumed an uptrend. But at 300, not quite yet.
474 points
spider348 answered 8 months ago …
Agree with ChaosNantuko. On the chart we are at '05 pricing and a chart support level. If GOOG holds under this 300 we could see 200 which is the next support from back in '04. Rather see signs of some kind of reversal - right now it's a falling knife.
Read more from spider348 flag as abuse great answer
3680 points
MNSL answered 8 months ago …
I think technology is the next most vulnerable sector after financial, property sector and commodity (Resources) sector due to so many factors.
Google share prices will come down further in the medium term. This is the time to sell technology stocks whenever there is a rally during next 06 months. Investors should forecast on the next rotating sectors with above average returns in the next 18 months and next decade now.
1902 points
alanj answered 8 months ago …
It's in a downtrend. Always trade with the trend. After todays price movement I would short the stock or buy put options at it's current price level.
Read more from alanj flag as abuse great answer
