Friday, September 21st, 2007
Google to Hit $600 a share? Looks That Way, Media Writer Says
From Staff Reports
Google Inc. (GOOG) at $600 a share? Media analyst and columnist Paul R. La Monica says it’s more than just possible - it’s probable. The shares of the search-engine gorilla dipped below the $500 level in mid-August after the company missed its second-quarter earnings numbers in July. Then there’s the credit crunch, which was “certain” to hamper growth, many so-called experts believed. But, since then, Google’s shares have roared. The company’s shares closed yesterday (Thursday) at $552.83, up $5.98, or 1.09%, each.
Indeed, since mid-August, Google’s shares have gained more than 10%, and are near their all-time high. Given that, it “seems likely” that it’s “only a matter of time” before Google will hit the impressive $600 plateau, La Monica writes.
According to the columnist and CNNMoney.com editor, the most recent market-research data supports his projection. Data from the two top Web tracking firms, Nielsen//NetRatings and comsScore (SCOR), both showed that Google has built up its lead over rival Yahoo! (YHOO). It maintained its huge market-share advantage over Microsoft Corp.’s (MSFT) MSN unit, Time Warner Inc.’s (TWX) AOL unit, and others.
Wall Street analysts expect Google to boost its earnings by 44% this year, 28% in 2008 and grow at an average annual pace of 34% for each of the next five years, La Monica says. That’s a much higher projected growth rate than Yahoo - yet Yahoo trades at 46 times projected 2008 earnings. Still, even Google isn’t cheap: The shares trade at 28 times projected 2008 earnings, meaning they aren’t for the faint of heart. And as a company grows, it gets tougher and tougher for it to keep growing at a high-double-digit rate - 34% a year for each of the next five years seems aggressive. And, yet, the company has done nothing but perform since it went public.
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News and Related Story Links:
- CNNMoney.Com:
Google at $600 a Share? Yes: Here’s Why - Money Morning Investment Research:
The Coming Big Money Bang.
Jim Rogers: China’s Expansion Depends on Water
Oil isn’t China’s most precious resource. China must spend $162 billion in the next five years to clean up its polluted rivers-as nearly 40% of them are undrinkable. "China has a huge water problem," Legendary investor Jim Rogers says. "…If they don’t solve it, or if they don’t solve it in time, then China has failed." Find out which six global water treatment powerhouses are set to make “liquid profits.”
