Google: Internet Darling No More
Aug 5th, 2008 | By Rick Pendergraft | Category: Stock Market InvestingAs recently as last November, Google was priced at over $700 per share. But the one-time Internet darling seems to have lost some of its allure. Google took Wall Street by storm in August ‘04 when the stock debuted at an even $100 a share.
Over the next few years, the stock seemed to know only one direction: up. It seemed that no matter how high the earnings expectations were each quarter, GOOG always exceeded them.
But things have changed with the economic slowdown that started last summer. Over the last three quarters, GOOG has missed earnings expectations twice, including the second-quarter results that were released on July 17.
As Google continued to climb higher, the stock price became out of reach for most investors, with a round-lot 100-share purchase costing more than $50,000. This resulted in more institutional investors trading in Google… and institutional investors are far less forgiving than individual investors.
My advice to you is to steer clear of Google. The company seemed invincible, but has proven otherwise in recent quarters. And though the shares may look like a bargain after dropping over $260 from the high, the uptrend in the shares is clearly no longer in place.
[Ed. Note: Being a good investor is as much about knowing what NOT to buy as it is about buying right. Investment analyst Rick Pendergraft can show you what to buy, what to avoid, and how to make smart choices. All by learning one embarrassing secret.]
Source: Google: Internet Darling No More
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Rick is currently the Editor-in-Chief of The ETF Options Trader and the Triple Wave Investor. At the age of 23, on the third options trade he had ever placed, Rick turned $1,800 into $22,000 in less than a week, when the company he bought became the target of a takeover. He admits it was a stroke of luck, but it was a memorable education as to the leverage that options can provide. He lives near Delray Beach, FL with his wife and three children.
