Any stock market always needs a benchmark. As a rule, it is a question of any issuer with sufficient capitalization, all traders, without exception, are eyeing the dynamics of the stock price of which in the eye, building their trading strategy. Sometimes several tickers (abbreviated names of issuers) become such “beacons” on the market at once. Since the beginning of the zero years, such a focus on the NASDAQ, of course, has become Google Incorporated. Let's try to evaluate the significance of this issuer, and also answer the question whether it is promising to buy Google shares from the perspective of investments for the medium and long term.
Google Stock Methodology - Fundamental Analysis
Any individual can buy shares in Google from a broker 24option .
The Internet is a huge array of information. And how structured the data stored on tens of thousands of servers determines the relevance of the Internet from the perspective of users. According to statistics, more than 28% of requests to the resources of the World Wide Web start with search engine searches (with the notorious “OK, Google!”; However, Google has long had to move here - it is far from the only search engine, albeit the most popular).
Nevertheless, the proportion of initial requests held does not determine the quality of the work of the entire corporation: a search engine is a high-tech development, and the dynamism of development is an obligatory factor here. So it will be more correct to note that in order to maintain a leading position in the industry of a company, it is necessary to constantly develop in order for its service to be in demand. These factors are purely fundamental - we will analyze them in more detail.
Field of activity
What does Google do? User responses, according to statistics from numerous surveys, are divided into the following positions:
- the provision of search services on the Internet (82% of responses);
- market launch and operation of various useful platforms (payment, etc.) (14%);
- tool of influence of the American special services (all other answers).
None of the answers, in fact, are correct. The revenue of Google Incorporated is generated through advertising. That is, the huge corporation whose shares equate NASDAQ traders is just a giant advertising agency.
Yes, you cannot discount payment platforms and other useful services for which people are willing to pay money, but for the entire history of Google, the proceeds from the placement of commercials (including the contextual advertising that interrupts the real text) have never been omitted below 85% of the company's total revenue.
(Moreover, the side services of Google are just a tool to attract the attention of numerous users).
Why are fundamental factors important for making an investment decision?
Google Incorporated was founded in 1998 (somewhere defaulted 4 times, and somewhere the greatest global corporations were founded ...) by Larry Page and Sergey Brin. And during the preparation for the IPO, it was immediately announced that the fundamental policy of the company is a fundamental refusal to pay dividends.
In 2014, 2 events happened with Google shares:
- Split - replacement of the majority of Type A shares with Type C shares. This is a special type of ordinary shares, which, however, do not have voting rights at the general meeting of shareholders.
- However, the bonus for Type “C” shares is a guarantee of maintaining the price of these securities on the organized market at a level not lower than a certain one. As a rule, a course is taken at the time of replacement.
This is an absolutely legal (in accordance with US law) procedure. And if the stock price of Google falls by more than 1% of the "replacement level", then the respective compensation payments are due to their owners.
Thus, the founders, as it were, say to all investors: if you are going to buy Google shares, then count in your strategies only on the increase in their market value and do not expect any “dividend handouts” - there will be none.
There are still Type B shares, but it is not possible to purchase them in free sale. These papers are distributed between the “founding fathers”, and one vote (“Type“ B ”share) corresponds to 10 votes (“ Type “A” shares). Page and Brin made sure their company did not get away from them.
Securities and structure of Google Incorporated
- Year of creation - 1998.
- The head office is located in the USA, California, Mountain View.
- Shares are listed on NASDAQ (since 2004).
- Tickers: GOOG - for “Type“ C ”; GOOGL - for Type A.
- The number of shares ("Type A + C") in circulation is 515.
- The number of shares ("Type" B ") - 52 million.
- Denomination - $ 85 (not to be confused with the price of replacing “Type“ A ”with“ Type “C”).
Companies Affiliated with Google Incorporated:
- Google Voice
- Zagat Survey
- Google Foundation
- On2 Technologies
However, in 2015, Google itself became an integral part of Alphabet Inc.. This was not a hostile takeover: the owners of Alphabet are the same individuals who at one time established Google. However, this brought some benefits in terms of diversification.
The project was initially positioned not as one of the many Internet search engines that existed at that time, but as a multifunctional user platform, where each service option supports all the others, increasing the total number of calls to Google’s resources.
The fact that you can make money on Google Incorporated shares is possible only on the market value, as well as the structural composition of the company, it is the fundamental analysis that comes to the fore when forecasting the value of its securities. In addition, the fact of the company's obligations to compensate the owners of the value of the shares if they fall below the replacement price is of great importance.
After all, this suggests that the corporation should be just super-liquid, in fact, be a money bag. And then in a crisis, anything can happen.
And such a strategy was absolutely true and successful: until 2007, the company's securities grew exceptionally, breaking away from the "replacement level" many times. Only in the 2008 crisis (during the problems with Fannie Mae and Freddie Mac) was there a significant correction. However, the American administration at that time spared no liquidity and went, including, and Google Incorporated.
Support was provided precisely to the extent that the turnover on Google shares accounted for a significant part of the total NASDAQ turnover.
After that, the market again established an exclusively uptrend for the securities in question. It is understandable: not only is the corporation itself ready to support its shares, so the government will supply it with money in a crisis, if that. So what is the technical analysis in general in this case? After all, everything determines:
- corporate managers' performance;
- arrangements with state financial authorities.
How and where to buy Google Incorporated shares for an individual
You can buy Google stocks directly on NASDAQ. However, access to trading can be carried out exclusively through a broker accredited to this American organized financial platform.
Brokerage house 24option is a full participant in stock trading. An individual can buy Google shares from this company. Any adult can register and open an account.
How much are Google Incorporated shares worth
At the moment (as of March 27.03.2020, 1110,09) GOOG “Type“ C ”costs $ XNUMX. And I must say that at this price the level of support has already been identified. However, in light of the fact that the corporation’s capitalization is affected mainly by fundamental factors related to its own activities, this is not surprising.
How much you can earn on Google stocks
It is much more interesting to estimate how much you can earn on these shares in the medium and long term. We analyze the situation, at least for six months:
1. spot segment:
purchase - $ 1160 on 03.09.2019/1522/19.02.2020., sale - $ XNUMX on XNUMX/XNUMX/XNUMX.
Earnings per share - $ 362. Profitability - (362/1160) * (170/365) = 66% per annum
2. futures segment:
Multiply the profitability in the spot segment by another financial leverage, which is 1: 6. It turns out a prohibitive value of almost 400% per annum.
With such liquidity and reliability of the corporation, this percentage is something fantastic. (Of course, you need to take into account the fact that at lows and highs, transactions are made only by super-lucky ignoramuses). In addition, you should pay attention to the trend (from September 2019 to the end of February 2020) - it is smooth and even, with minimal volatility. Beauty!
This is extremely important precisely for fans of the game with futures (at higher rates), since there is no need to freeze outrageous funds on a margin account. It will be enough to invest 50% of the value of the purchased options, which means that the yield on derivatives falls to a “modest” 250% per annum on super-reliable securities, the issuer of which actually has state support.
Factors Affecting Google Incorporated Stock Price
We list the factors affecting the value of Google shares in a short line:
- General world market conditions.
It is foolish to deny that the papers failed after the market during the last “coronavirus crisis”. However, where the rest fell into the abyss, Google escaped with a “slight fear”: its papers fell by only 27%.
- Creativity of company managers.
The success of the development of the whole company depends on how creative and successful they are in their forecasts.
Google does not produce oil - it provides very flexible services at a price. But he does it so qualitatively and competently that the capitalization of Gazprom is not good for him!
If you invest in an organized financial market, then only in American papers on the NASDAQ: it is both reliable and potentially extremely profitable. Here we need to try to find an issuer that does not have growth potential after the impact of the global falling market on the market is over. So, individuals are strongly advised to buy Google stocks after opening an account with the 24option brokerage company.
(Papers of domestic issuers will rise or not is unknown, but Google will definitely shoot).