View Full Version : would you buy GOOG or BHP stock if you were to pick just one? why?


bernardmailman2735
09-07-2004, 12:54 PM
im planning to buy either one of the two, appreciate your comments on these stocks, thanks

Hans
09-17-2004, 06:50 AM
if you are sure that the stock would go up. why don't you buy call option instead of the stock itself . i think options is better because the return is greater and the risk is smaller than those of stocks.

ThinKaboudit1040
09-27-2004, 12:45 AM
This is a bit of an odd choice, like asking if you should buy shoes or a washing machine!But of the two, if I HAD to buy one, I would probably go with BHP. When almost everybody says "buy! buy! buy!" as they are currently doing with Google, that's a sure sign it might be a bubble.BHP pays a (modest) dividend, and is in a business that will be in business for the foreseeable future. GOOG probably isn't about to vanish, but their whole business is based on an "idea", so there is always the risk someone will suddenly come along with a better idea that makes them obselete!Why not buy half as much stock in each? Diversity is the key to successful growth

SWH3323
10-06-2004, 06:40 PM
GOOGGoogle has tremendous potential to expand its dominance in coming years. But in order to be willing to make a long bet on the stock, I need to feel comfortable that my investment downside was fairly limited despite the risks the company faces.DownsideLet's assume Google earns $15 this year ($0.12 below current estimates) and only manages 20% growth in 2008, to $18 in earnings per share ($1.25 below current estimates). Let's further assume that Google trades at a P/E of 25 next year. I think both of these assumptions are extremely conservative. A 25 P/E on $18 in earnings gets us a stock price of $450 per share. In my opinion, that is my downside over the next 12 to 18 months, less than 3%!UpsideA conservative analysis take the current consensus earnings estimate of 27% growth in 2008, to $19.25 per share and assume that the company continues to beat estimates by a modest amount. It would not be surprising at all to see 2007 EPS numbers head to toward $16.00 by year-end and 2008 numbers to actually come in closer to $20.00 per share. Further, assume GOOG trades at a P/E of 30.That multiple may seem high given that the market trades at half that valuation. However, Google will grow at least 20% per year over the next few years, so assuming that growth investors will be willing to pay 30 times earnings for the stock is fairly reasonable. It would be in-line with valuations given to other leading Internet companies.Quick math shows that a 30 P/E on profits of $19.25 to $20.00 in 2008 implies a stock price of $577 to $600 per share. Even if we use a more conservative P/E of 25 instead, we get to $481 to $500 per share. Accordingly, the upside is as much as 30% by the end of 2008. Compare this with downside of less than 3% and you can see why I think Google stock in the low 460s is a good investment, even in an overbought market such as the one we are seeing right now. ///