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Google Shares Push Toward $500 Again
Thursday January 11, 10:30 am ET
Google Shares Push Toward the $500 Mark As Analyst Sees Stronger-Than-Expected 4Q
NEW YORK (AP) -- Shares of Google Inc. headed north toward the $500 mark Thursday morning, after an analyst raised estimates on expectations for a strong fourth quarter.
The Mountain View, Calif.-based company's stock added $9.38, just under 2 percent, to $498.79 in morning trading on the Nasdaq Stock Market. Shares have retreated from a 52-week high of $513 in November.
In a research note, Goldman Sachs analyst Anthony Noto encouraged investors to buy shares of Google.
"Several factors could unfold over the coming months to unlock the value we see in Google shares," he wrote. Noto forecast "strong fourth-quarter 2006 results due to a solid holiday season that likely benefited from continued advertiser demand, seasonal strength in traffic, and recent product launches (including Checkout)," the company's online payment system.
The analyst also looked ahead to benefits from soon-to-launch partnerships with eBay Inc. and News Corp.'s MySpace, and ad-revenue growth from video and display formats, pay per call, radio, print and television.
Noto further wrote that he expects a boost from the launch of a premium, add-free version of Google's Apps for Your Domain, which will sell the e-mail, Web building and office software package to businesses.
Noto reiterated his "Buy" rating on the stock and said upcoming catalysts "could render our $595 price target conservative."
He raised estimates for the fourth quarter to a profit of $2.90 per share on $2.19 billion in revenue, from his earlier forecast of a profit of $2.81 per share on $2.15 billion in revenue.
http://biz.yahoo.com/ap/070111/google_mover.html?.v=1
Most Under Priced Calls: GOOG Jan 510 Calls...
http://biz.yahoo.com/tm/070111/15310.html?.v=1
Analysts Say Google's a Buy
By TSC Staff
1/11/2007 9:15 AM EST
Google (GOOG - commentary - Cramer's Take - Rating) was benefiting from positive Wall Street commentary Thursday, with analysts saying the Internet search giant remains a buy.
Goldman Sachs put a price target of $513 on Google's stock -- the same as the 52-week high -- and lifted its profit estimate for the current quarter to $2.90 a share. Goldman reiterated a buy rating.
Anthony Noto, the analyst at Goldman, also said Google should earn $17.47 a share in 2008.
Meanwhile, Banc of America affirmed buy ratings on both Google and Yahoo! (YHOO - commentary - Cramer's Take - Rating), saying they could have revenue that's above estimates in the second half of the year.
Shares of Google were higher by $4.99, or 1%, at $494.45 in premarket trading. Yahoo edged down 2 cents to $28.68.
http://www.thestreet.com/_yahoo/newsanalysis/techstockupdate/10331971.html?cm_ven=YAHOO&cm_c....
Google $513 Next Stop
By Jim Cramer
RealMoney.com Columnist
1/11/2007 9:50 AM EST
The target for Google (GOOG) is $513. I believe that the Goldman Sachs note, reiterating the buy rating and raising estimates to $2.90 for the quarter, could get this stock there. That's the 52-week-high, and if we take it out you have a good chance to ramp right to $550 and beyond!
Anthony Noto, the Google analyst, is the best in show on this tock. He's got a solid, rigorous analysis, including big monetization of MySpace and eBay (EBAY) relationships, and growth from new formats such as YouTube and again, MySpace. Those, plus Google's own initiatives such as premium Google applications, will all produce the upside.
What's most exciting to me, though, besides the near term, is the incredible $17.47 earnings estimate for 2008. Holy cow. What should we pay for that kind of growth? How about if we just give the stock a 40 multiple -- which is not even the top multiple out there, despite this company have the highest-percentage earnings growth of any big-cap?
That multiple means you eventually are going to see something north of $680 on GOOG.
To me, this is a clarion call to own the GOOG common -- and to buy the January $510 calls right now for a buck and change.
What a wake-up call!
http://www.thestreet.com/_yahoo/markets/activetraderupdate/10331979.html?cm_ven=YAHOO&cm_cat...
"Twenty points away from Nirvanaville. ... This company's [GOOG] gonna have a good quarter. I want to own this stock under 500." -- Cramer 1/10/07
http://www.thestreet.com/_yahoo/funds/lightninground/10331877_2.html
Get Me Rewrite
By Jim Cramer
RealMoney.com Columnist
1/10/2007 2:15 PM EST
One of the most common stories that journalists love to write has this at the core thesis: "It's really good, it can't continue to be this good."
That's such an easy story to write. This thesis is somewhat like your mother saying, "If you get too much of a good thing you might get hurt."
It has a natural resonance.
This is the type of story that always passes for prudence. How can you get hurt, how can you hurt anyone by suggesting that things will naturally get worse?
The problem again is that there is such a thing as opportunity cost. There's also what I call the Berkshire Hathaway (BRKA) problem. How many times, using this logic, would you have sold Berkshire?
Twenty? Thirty? What a hard act to follow Warren Buffett has delivered for 30 years.
How about Sears (SHLD) ? Eddie Lampert keeps delivering but that can't continue, right? Isn't it prudent to warn people off that? Lloyd Blankfein can't possibly continue to deliver those kinds of numbers at Goldman Sachs (GS) . Don't we have to recommend selling Apple (AAPL) ? How can the iPhone sell like the iPod. Isn't it "right" to write a cautious article? Aren't you being helpful when you do?
I, point blank, reject that view, empirically. Given that the Dow was at 1300 when I began investing other people's money, I keep thinking how reckless it would have been to be "prudent," the way these articles suggest.
Mind you, there are always examples where it would be "prudent" which energizes those who write these pieces.
But the reality is that it might be just as prudent to suggest that companies can repeat or even improve on performance. Anyone who understood this concept, say, during the Andy Grove years at Intel or the Bill Gates years at Microsoft knows exactly what I am talking about. The people who stick with Google will also learn this lesson the easy way.
It wouldn't matter if there were simply a couple of assignments now and then that suggest it would be prudent not to sell.
I just don't read them. Maybe they are censored from my papers?
http://www.thestreet.com/p/_rmct/rmoney/jimcramerblog/10331789.html
You're welcome! :)
Who me? When you feel a Diamond White Escalade sliding into your lane, you know it's my cellphone with cream & sugar. :)
Can't wait for reliable VR... so those other guys stay out of my two lanes. :)
After Years of Effort, Voice Recognition Is Starting to Work
January 10, 2007; WSJ.com
So maybe you won't be talking to your car anytime soon, the way Microsoft and Ford would like you to be. Odds are, though, that you are already on speaking terms with silicon, probably more than you realize. And you can expect to be chatting it up more and more.
Almost since computers were invented, computer scientists have been working to get the machines to understand what people are saying to them. Until the past few years, they hadn't been successful enough to offer anything but lab demos. Now, though, computer speech recognition is sufficiently advanced that it is showing up in a surprising variety of places. Like automobiles.
This past Sunday, at the big Consumer Electronics Show in Las Vegas, Bill Gates and Ford Motor executives described how Microsoft's Sync software will let drivers use spoken commands to play music and dial their phones. Actually driving the car using voice commands isn't in the cards, at least not for a while.
Vista, the new version of Windows, has some fairly advanced voice-recognition software built into it, but Microsoft isn't making much of that in its marketing of the software, and users who want to explore voice in Vista will probably have to do so without a lot of help from Microsoft.
The leading personal computer product for speech recognition is called Naturally Speaking. The product has a somewhat serpentine history: It is now owned by Nuance Communications, formerly ScanSoft, which, through a series of acquisitions, like that of Dictaphone, is trying to remake itself as the country's leading supplier of speech-recognition technology.
Most people using Naturally Speaking say it works acceptably well right out of the box, though you have to be more careful with enunciation that you would otherwise be. You speak into a microphone, and the words appear on the screen; corrections are easy to make. As the program gets trained to your speaking style -- and vice versa -- accuracy rates improve.
While voice-controlled computers are sci-fi staples, in practice most people find a keyboard and a mouse are fine for telling a PC what to do. Bill Meisel, a veteran observer of the speech-recognition market, says the main use of speech recognition at the moment is in specialized applications like law and medicine. Radiologists, for example, are increasingly dictating their diagnoses and observations into a speech-recognition program rather than into a tape recorder that must later be transcribed.
At its core, speech recognition takes advantage of extraordinarily complex statistical methods to match the sounds you say with the right words. The steady increase in computer power means that software can now be "trained" for many thousands of hours before it gets shipped, as opposed to mere dozens of hours 10 years ago.
One of the biggest applications of the technology is in call centers. Many directory-assistance services use some form of speech recognition, often from Nuance, to be able to process a request without the need for a human operator. And more complicated sales and support tasks are being automated as well. You can now buy (or try to buy) a plane ticket by talking to an airline's computers. (For all of my fascination with the technology of speech recognition, I, too, would rather have a person on the other end; too bad these jobs are being outsourced from human beings altogether.)
Up next, predicts Mr. Meisel, will be the use of speech recognition to search the Web. Google and Yahoo are both expected to introduce voice-based search for mobile-phone users soon in which you say what you are searching for and hear the selections spoken back to you. Both companies have hired speech-recognition experts. Indeed, Yahoo got into a legal tiff with Nuance when it hired away 13 Nuance engineers.
IBM, which has long had a well-regarded speech-recognition research effort, has ambitious plans, like a program that can monitor a meeting with four or five people taking part and then produce an accurate transcript. Since most programs now deal only with a single speaker, that is still a bit in the future.
But David Nahamoo, who oversees IBM's speech research, says that some other new applications are already at hand. One is a system that produces automatic translations of foreign-language broadcasts, such as those in Arabic, first by performing speech recognition of the spoken words and then by using translation software to render things in English.
The system is very far from being perfect, but it's good enough to give the gist of what is being said. For a U.S. government agency short of Arabic speakers but still trying to monitor events, that may be good enough.
Outside of intelligence services, there is quite a market for some of the pieces of such a system. For example, TV stations are being pressured to provide closed captioning for hearing-impaired viewers but don't have the staff to do so. Software might be good enough in a few years to handle that automatically. The same might work on a professor's lecture: Imagine sleeping through class but not missing a single word.
http://online.wsj.com/article/SB116839144214572104.html?mod=yahoo_hs&ru=yahoo
Most Under Priced Calls:
Google Jan 500 Calls (NASDAQ:GOOG - News). GOOG's PowerRating is 5.
http://biz.yahoo.com/tm/070110/15304.html?.v=1
Qwerty? Your age is showing, D! :)
Brace Yourself for the iPhone Effect
By Michael Comeau
Research Analyst
1/10/2007 9:40 AM EST
The mobile-phone supply chain is a highly complex machine with countless moving parts, including phone makers, component suppliers, telecom carriers, government agencies and infinitely fickle consumers. Well, Apple (AAPL) just blew the whole damn thing up with its new iPhone.
In terms of style, the iPhone is the most impressive consumer electronics product I've seen in some time. With its big touch screen, innovative keyless interface, decent storage capabilities and OS X operating system, there is simply nothing like it on the market. I mean, just take a look at this thing.
Plus, like many of Apple's products, it is a marvel of design dictated by common sense. It has a two-megapixel camera so users can take decent pictures, WiFi capabilities, four or eight gigabytes of storage and, unlike other phones with audio/video capabilities, a standard 3.5-millimeter headphone jack so you don't have to buy some ridiculously expensive proprietary adapter.
Plus, it features the ability to deactivate the screen when you bring the phone to your ear, to save on battery life and prevent you from unintentionally activating anything that may be on it at that time. I expected the phone to be something simpler, but from what I've seen, it handles its complexity fairly well and should in no way be overwhelming to the average user. If there is anything to complain about, it appears that the phone does not have 3G Internet capabilities.
It isn't cheap at $499 or more for a two-year contract with Cingular, but that doesn't matter now because of the huge pent-up demand. Let's not forget, Palm (PALM) has introduced past Treo smartphone models in the same price range, so it's not a stretch for Apple to do so, especially considering the rich feature set.
The iPhone is a fantastic strategic move by Apple. When everyone targeted the original iPod and the iPod Mini, Apple killed them and put out the Nano and the video iPod. Then everyone targeted the Nano and the video iPod, and phonemakers such as Sony-Ericcson and LG cranked out music-enabled phones to benefit from the digital-music boom driven by Apple. So Apple drops the iPhone on them.
And let's not forget that Microsoft (MSFT) , which tried to kill the iPod with the ill-fated Zune, now has a new mark in the iPhone. Apple is a moving target of the deadliest kind.
And now Apple has catapulted itself into the roughly one-billion-units-per-year mobile-phone market, which is a heck of a lot bigger than the MP3-player market the iPod dominated. Plus, one would think that Apple likely secured favorable pricing terms with Cingular for the iPhone, and that is certainly going to draw subscribers. Plus, this phone will stand out in any phone store, and there is now yet another reason for countless consumers to wander into an Apple store, where they just might also walk out with a Mac.
The timing also looks great, with the iPhone being available in June. Like it did with the Nano and iPod Mini, Apple isn't sitting around waiting for people to get tired of their products. It is proactively changing the game on its own terms on a regular basis, while competitors such as Microsoft focus on playing catch-up rather than actually innovating.
As I implied above, the major phone makers are now in even more serious trouble. Motorola's recent guidance cut was the result of weak pricing, as unit growth is being driven by low-cost models favored by emerging markets. However, now Motorola and the other phone makers have a major new competitor in the higher-priced developing markets, one that is poised to take market share as quickly as it can produce its models.
The smartphone market is not very big, and Apple expects to sell 10 million units in 2008, a conservative estimate (in my view anyway) that will certainly affect the pricing power of competing models that simply don't stand out next to it. And since Cingular has a multiyear exclusive on the iPhone, that carrier is likely to see an acceleration in subscriber growth as consumers defect for the iPhone, reducing phone demand at other carriers. Additionally, other phone providers on Cingular's network are likely to feel some pain as subscribers wait for the iPhone to come in stock.
Another factor is that Apple almost definitely has another phone up its sleeve, possibly something simpler in a lower price range that can appeal to those who are not willing to pony up big bucks for a phone, as it eventually did with the iPod Shuffle.
The phone maker best positioned to withstand the iPhone assault is Research In Motion (RIMM) because of its entrenched position with BlackBerry-wielding corporate soldiers across the universe. But I would definitely think twice about holding the stock of any other mobile-phone company.
As for Apple's stock, expect 2007 to be a roller coaster, even more so than 2006 was. The effect of the iPhone on the current iPod models is unclear as of now, and the news and rumor flow will be cranked up to an extreme level, turning Apple into the ultimate "buy the dips" stock. But over the long term, I believe that the success of Apple's phone initiatives has the potential to dwarf that of the iPod and represents an annual revenue opportunity literally in the tens of billions of dollars.
http://www.thestreet.com/p/_htmlrmm/rmoney/telecom/10331680.html
Jobs does it again... I want one!
And I'm not even a teenager!
http://www.engadgetmobile.com/2007/01/09/the-apple-iphone-runs-os-x/
Apple Gets It. Got It?
By Jim Cramer
RealMoney.com Columnist
1/10/2007 11:14 AM EST
Thank heavens I have teens! Without them on this Web stuff, you don't have a clue.
You believe that when the newspapers get together for Web initiatives -- as Gannett (GCI) , McClatchy (MNI) and Tribune (TRB) are, according to The Wall Street Journal -- it will save them, even though my kids wouldn't know a newspaper from a black-and-white television.
You think that when a major network such as CBS (CBS) offers some sort of unoriginal programming on the Web that people will watch it, until you get the word from those execs that they'd prefer watching reruns of Matlock to coming up with something that would cause them to throw up.
You believe that the initiatives we see from the online divisions of Disney (DIS) or from NBC's hapless iVillage will have some traction until the teens tell you that you have no idea what you're talking about. (Only Fox has penetrated that group, and that's because the network is represented on iTunes with episodes of 24. Then there's fellow News Corp. (NWS) business unit MySpace.com, which teens love.)
And then there is Apple (AAPL) . I gave my eldest daughter her fourth iPod for the holidays, this time one with expanded battery. I gave my youngest the video iPod 'cause she wants to re-watch episodes of 24 on the small screen.
Now I am praying that they don't see any video about the iPhone. Because if they do, I will have to spend the next five months getting this product before other kids get it.
When we think Web, we're still approaching it as if it was something that's a dumping ground for content developed for television, or where you can link to old programming in order to further monetize it. "We" is frankly anyone not in their teens or 20s.
Painful.
We aren't used to businesses that are related to the teen demographic (with the exception, again, of Fox, which always amazes because Murdoch seems to know what this group wants). We look at a Sony (SNE) gadget that is superior to Apple on the face of it and we think, That's the end of Apple. Or we look at Microsoft's (MSFT) vast cash hoard and its success with Xbox and we presume, Apple wipe-out.
Doesn't Creative (CREAF) have a "better" MP3 player? Isn't iTunes more expensive than what Universal's doing?
Oh, give me a break.
Cachet is something that trumps all of that. You can't pin it down. You can't measure it or graph it or put it in a metric.
And then you take the kids to a game or you do the carpool or you pick your kids up from a sleepover or you have a slumber party for them -- and all the kids put their cell phones and their iPods down next to them wherever they are. It's always the cell phone and the iPod.
Now, suddenly, the iPod is going to be the iPhone. One cool device instead of one OK utility and one cool device. They won't be able to resist it.
And I'll pay for it.
"OK," you say, "People can't afford it."
I say, "You go tell your kid that when everyone else has one."
Apple gets it. That's not in the numbers. It can't be. The guys who make the numbers are usually too young to have kids.
I am old. I have the edge.
http://www.thestreet.com/p/_peprmjc/markets/activetraderupdate/10331723.html
Jobs is spreading it around...
The phone supports Wi-Fi and Bluetooth wireless technology and can detect its location from Global Positioning System satellites. It has Apple's Safari browser for Internet surfing. Apple is partnering with Yahoo Inc. on Web-based e-mail and Google Inc. on maps.
The product gives Apple access to the huge cellphone market, with nearly a billion handsets shipped every year. That dwarfs the nearly 70 million iPods Apple has sold over the past five years.
Apple will likely have to pay Cisco Systems Inc. for the right use "iPhone" as the name for its new cellphone. Cisco, which owns the rights to the name and unveiled a line of Internet-based phone devices using the brand last month, said it has been in talks with Apple about the trademark and expects to sign an agreement later today.
http://online.wsj.com/article/SB116836172312771508.html?mod=yahoo_hs&ru=yahoo
harr: Thank you, kind sir!
harr: Who at TheStreet.com is supposed to have authored this "report"? As longtime subscriber to many of their services do not recall any mention of MobilePro. Repeated searches also turn up nada. thx
harr, gotta link? Multiple searches of TheStreet.com (including RealMoney.com and ActionAlertsPlus) reveal no mention of MobilePro other than quotes and outside articles. thx
http://find.thestreet.com/cgi-bin/texis/find/results.html?qt=mobilepro
Cramer has repeatedly said stay away from microcaps.
Also, never heard him or his website mention MobilePro. http://www.thestreet.com/
San Francisco finalizes Wi-Fi deal with EarthLink, Google
Associated Press, Fri, Jan. 05, 2007
SAN FRANCISCO - EarthLink Inc. and Google Inc. have finalized a four-year deal to provide free wireless Internet service throughout San Francisco after seven months of sometimes-tense negotiations that stalled the city's effort to ensure all its residents, visitors and businesses have easy access to the Web.
San Francisco Mayor Gavin Newsom signed off on the contract Friday, but the details still require the approval of the city's Board of Supervisors and Public Utilities Commission.
A five-member panel picked EarthLink and Google Inc. to build the project in April, with the goal of having the system running by the end of 2006. It now appears that the wireless, or Wi-Fi, service won't be available throughout San Francisco until early 2008, although limited access may be available as early as April.
Google launched a free Wi-Fi service in August in its home town of Mountain View, making the 11.5-square-mile city of 72,000 people the largest U.S. community with free Wi-Fi throughout its borders.
Those bragging rights presumably will belong to San Francisco, with a population of roughly 800,000, once its Wi-Fi service is finally up and running.
More than 250 communities nationwide either are preparing or have deployed Wi-Fi services, but most of those include access fees. The list of big cities pursuing major Wi-Fi projects include Philadelphia, Minneapolis and Chicago.
The estimated $14 to $17 million cost of building and maintaining the Wi-Fi system will be shouldered by EarthLink. The Atlanta-based company will try to recoup its investment by charging $21.95 per month to surf the Web at speeds three to four times faster than the free service, which will still be quicker than using a dial-up modem.
Online search leader Google will sell ads to help subsidize the free service. About 3,200 low-income residents will be able to subscribe to the faster Wi-Fi service for $12.95 per month.
San Francisco will get 5 percent of the subscription revenue - a cut estimated to be worth about $300,000 annually. That figures indicates EarthLink expects the Wi-Fi service to generate about $6 million in annual sales.
EarthLink also will pay the city $600,000 for right-of-way access and $40,000 annually to place Wi-Fi equipment on street poles.
The contract contains options that could extend the deal's initial four-year duration by another 12 years.
Newsom began his push for a free Wi-Fi system in 2004, touting his vision as a way to keep San Francisco on the cutting edge of technology while making it more feasible for poor households to get online. San Francisco estimates about 30 percent of its residents don't have Internet access at home.
"This agreement to bring free universal wireless internet access to San Francisco is a critical step in bridging the digital divide that separates too many communities from the enormous benefits of technology," Newsom said.
San Francisco's original timetable for launching the service was delayed as city leaders with EarthLink and Google over privacy concerns, the contract's length and financial arrangements.
EarthLink and Google addressed the privacy concerns by giving users the choice to block the service from tracking their precise location. Google believes the ability to pinpoint a user's location might help the company deliver more useful ads about nearby merchants.
At one point in the talks, Google publicly vented its exasperation with San Francisco's bureaucracy, saying it had far less difficulty gaining approval to build a free Wi-Fi service in Mountain View.
http://www.mercurynews.com/mld/mercurynews/news/breaking_news/16394029.htm
Cramer's 'Mad Money' Recap: Lightning Round 1/5/2007
Cramer was bearish on Yamana Gold (AUY) , Ultra Petroleum (UPL) , Deere (DE) , EarthLink (ELNK) , Cleveland-Cliffs (CLF) , Amylin Pharmaceuticals (AMLN) , AngioDynamics (ANGO) , Sonus Networks (SONS) and Shanda Interactive (SNDA) .
http://www.thestreet.com/funds/madmoneywrap/10331078.html
Google is a well-oiled machine in a hot market. But is it a $650 a share machine?
"Overall, we believe Google's unique ability to cost-effectively connect people with information, products and/or services on an unprecedented scale has made it the linchpin to the entire Internet economy," wrote Cantor Fitzgerald analyst Derek Brown when he initiated coverage of Google with a $650 price target on Dec. 21.
While most other analysts would agree with Brown, they're not as bullish on the stock. The mean target price for Google's shares is a much tamer $549, according to analysts' estimates gathered by Thomson First Call. Brown admits that his target is based on projections of "slightly faster growth and incrementally higher levels of profit" than most other analysts. For example, Brown forecasts that Google will rake in earnings per share of $13.10 in 2007, a lofty goal compared to consensus estimates projecting $12.68 a share. Brown says his price target is 35 to 40 times his price to pro-forma earning-per-share projections of $18.27 a share for 2008.
Perhaps Brown's $650 price target is ahead of itself, but it's hard to ignore the fact that even while its growth is slowing, Google is still pulling in some rather impressive revenue and earnings growth — and that will most likely mean great things for investors who stay in the stock.
"We fully recognize that the party at Google has to end sometime," wrote Cantor's Brown. "Yet, we see no obvious signs that Google's business has hit the proverbial wall or that consumers and advertisers are radically shifting their behavior away from Google and toward its competitors."
I may think a $650 price target seems a little overblown, but I agree with Brown that Google does have legs — at least in 2007 and probably beyond. For investors, it still makes sense to invest in Google. One thing you won't be searching for is profits.
http://www.smartmoney.com/Techsmart/index.cfm?story=20070105&afl=yahoo
Did your TA forsee this breakout?
Still a lot of people who haven't loaded up yet, FA, not to mention those goldbugs. :)
Sell Rules Revisited
By Jennifer Openshaw
TheStreet.com Contributor
1/5/2007 11:56 AM EST
Selling is an emotional thing.
Most of us are married to our investments, expecting something positive despite the most obvious and ominous outward signs. We hope, largely based on gut feel, that things will always get better.
Further, many of us have been conditioned by past experience: One of our stocks climbs, meets and exceeds our goals, and we sell. Boy, does it feel nice -- for about two days. Then it goes on a tear, and we reflect miserably on the money left on the table.
Nowadays, many investment books will offer hard and fast sell rules, such as sell when a stock meets your price target, or sell when it drops 10% from where you bought it.
We're so conditioned to these rules that we take them as gospel. And they're preached widely enough that they have a significant following.
I don't discard the hard rules completely; they have their purpose and can work well.
But after all, didn't we put a lot of thought and research into the buy decision?
Shouldn't the sell decision get at least as much thought?
Click here for the video version of this story from Jennifer Openshaw. http://publish.vx.roo.com/thestreet/portal/?clipId=1373_10330864&channel=Personal+Finance&pu...
I propose the following "thinking" sell rules, which boil down into two whens and a how.
When: Sell when fundamentals change.
You bought a car for gas mileage, but it doesn't get good gas mileage anymore. The business has changed -- new competitors, changing customer tastes, loss of market leadership, a bad acquisition, questionable management, trouble with the law.
Intel (INTC) has a dogged new competitor in AMD (AMD) , Pfizer (PFE) just can't seem to bring a new drug to market while losing ground to generics, Ford (F) can't do anything right, and more recently, questions about Dell's (DELL) financial statements and business model swirl through the media.
When: Sell when there's something better to buy.
This may seem like a blinding flash of the obvious, but I've seen investors forget it over and over. When to sell? Simply, when some other investment makes more sense, either for higher returns or greater safety, or both.
If your investment has climbed a ladder and you see more rungs to the downside than the upside, maybe it's time. So what about selling those Google (GOOG) shares? Only if you believe some other investment -- or a money-market parking space -- will do you better.
Remember, investing is all about allocating capital. And as investors, we try to allocate capital where it makes the most sense; that is, where we can get the most return for the risk we're willing to take.
How: Sell fractionally.
Set a price target if you want, but don't sell everything. Fractional selling -- selling part of a position -- locks in some gain, produces some cash and reduces exposure to downturns. You can always buy the fraction back at a lower price, or buy something else.
Of course, it depends on circumstances. If the fundamental collapse is severe or if there's something way better to buy, a 100% "fraction" makes sense.
Keep in mind that doing nothing is OK, too, if your investments are all in the right place. But if you believe it's time to sell, it pays to take a rational approach, just like you did when you bought.
http://www.thestreet.com/_yahoo/funds/toponepercent/10330578.html?cm_ven=YAHOO&cm_cat=FREE&a...
30 of 33 analysts onboard
Jan 05, 2007 (Nelson's Broker Summaries via COMTEX) --
Company: GOOGLE INC
Consensus Recommendation: BUY
(Strong Buy: 10, Buy: 20, Hold: 2, Underperform: 1, Sell: 0)
Quarter Consensus Estimate [Q1]: 3.21
FY Consensus Estimate [FY2007]: 13.79
Next FY Consensus Estimate [FY2008]: 17.86
Industry: TECHNOL/SOFTWARE
Estimates reported in USD
http://www.thomsonfinancial.com
Vulture feed! :)
Google Growing Revenue At 3x Peers'; Analysts Remain Upbeat
Seeking Alpha, Posted on Jan 3rd 2007
Eric Savitz (Barron's) submits: Google (GOOG) today was placed on the Stifel Nicolaus Select List, the brokerage firm’s roster of its top stock picks. Google replaces eBay (EBAY), which the firm continues to rate a Buy.
In a note this morning, Stifel’s Scott Devitt notes that he expects annualized revenue growth for the company over the next two years of 41%, with EBITDA margins “approaching 61%.” He notes that Google is growing revenue at 3x the rate of its peers.
A couple of fun facts from Devitt’s note: he expects Google to generate $5.5 billion of net profit in 2008, which is about $300 million more than Amazon (AMZN), eBay (EBAY), Expedia (EXPE), IAC (IACI) and Yahoo (YHOO) combined. The market caps of those companies combined is about $116 billion,versus $143 billion for Google.
Meanwhile, Credit Suisse’s Heath Terry today reports that Google’s domestic query market share rose to 46.9% in November, up 1.5 percentage points, citing ComScore data. He says the gains came at the expense of MSN (MSFT), AOL (TWX) and ASK (IACI) which lost a combined 1.3 percentage point of market share. He says ComScore will release global search data next week.
Terry says ComScore data shows that Google page views in November reached an all-time high 94.9 billion. YouTube page views in November totalled 7.06 billion, up 11% sequentially, and 8,929% year-over-year.
Terry says keyword pricing was up 7% in December, with domestic pricing up 8%, and international up 4%.
Terry says Google remains his favorite Internet stock; he has an Overweight rating and $600 price target.
Also today, Piper Jaffray’s Safa Rashtchy raised his price target on Google to $630 from $600, in a piece in which he named the stock his top pick for 2007. Rashtchy also said a proprietary survey of Internet users showed increasing adoption of Google’s non-search products.
http://internet.seekingalpha.com/article/23410
730? Now you're in Jim Cramer Country! :)
Google to Unveil Tie-Up in China Pact With Video Site Comes as Search Firm Seeks to Extend Reach
WSJ.com, January 5, 2007
BEIJING -- Google Inc. is expected Friday to announce a partnership with a Chinese software provider as part of the company's bid to extend its dominance beyond Internet searches to other online services.
Jackson Zhang, spokesman for Xunlei Network Technology Co., which provides video and game downloads, said the company is forming a strategic partnership with Google to be announced at a news conference Friday. A Google spokesperson confirmed the company is jointly hosting the event, but declined to comment further.
State-owned China Daily reported Thursday that Google is joining up with Shanghai-based venture-capital firm Ceyuan Ventures to buy a stake in Xunlei. According to Shenzhen-based Xunlei's Web site, the four-year-old company is one of China's largest providers of video-downloading services. The company has 54 million subscribers, estimates Beijing-based Internet-research company iResearch Consulting Co.
Separately, Google China on Thursday said it was teaming up with China Mobile, the nation's largest mobile-telecommunications carrier, to provide online-search services for cellphones. Google said trials of the mobile search service started in December and will be launched soon across China. The effort echoes Google's move to offer mobile services and sell related advertising elsewhere.
Google, the world's largest search-engine provider, has been looking to broaden its Internet presence globally. In October the company agreed to buy U.S.-based online-video-sharing company YouTube Inc. for about $1.8 billion in stock, a move that could at one stroke make Google a leader in the fast-growing online-video market.
Yet U.S.-based Google has had difficulty extending beyond its dominant English-language search site to sites in other languages around the world, where local competitors are enjoying linguistic and other home-grown advantages.
In China, the second-largest Internet market after the U.S., Google is a distant second behind Baidu.com Inc. According to iResearch Consulting, Google held a 19.2% share of China's market for Internet searches in the third quarter, compared with 63.7% for Baidu.
Hou Tao, an analyst at iResearch Consulting, said a potential alliance between Google and Xunlei is a "win-win deal for both sides." By combining download services with search capabilities, both parties stand to grow, Mr. Hou said.
Gaining dominance in China's Internet-search space is difficult, because an estimated 70% of China's Internet users don't access Internet-search sites directly, said Bill Milewski, chief financial officer of Chinese search engine Bbmao.com. Instead, most Chinese users employ search tools featured on other Web sites, such as games or news portals, he said.
http://online.wsj.com/article/SB116793563237767297.html?mod=yahoo_hs&ru=yahoo
Safa has been consistent in his bullish targets for GOOG, just too early. When GOOG breaks earnings estimates again, expect the others to jump in.
Balmer's new strategy to catch GOOG? :)
Microsoft's Live.com Advertises On Google
Jan. 3, 2007 at 9:38pm Eastern
It is always amusing when one of the big search engines advertisers on one of the other ones. Both Google and Yahoo advertise through each other's PPC programs. And now it looks like Microsoft has jumped into it as well, by advertising Live.com through Google AdWords, according to Google Blogoscoped. http://blog.outer-court.com/archive/2007-01-03.html#n72
However, the same search on Yahoo doesn't show the same Live.com ad, so they are obviously being selective about where they spend their advertising dollars!
http://searchengineland.com/070103-213833.php
Here's some news you can trade on, webber...
Experts say Google will be No. 1 in visitors in '07
USA TODAY, January 3, 2007
Internet search giant Google, which defied gravity last year, is set to become the world's most visited Internet site in 2007.
Google's revenue hit $7.2 billion for the first three quarters of 2006. Its stock briefly topped the $500-a-share mark. Most significant, Google in October acquired high-flying video site YouTube for $1.7 billion. Measurement services comScore Media Metrix and Nielsen//NetRatings plan to add YouTube to Google's overall rankings this year.
That "assures that Google will be number one in both worldwide and U.S. visitors," says Danny Sullivan, editor of the SearchEngineLand blog.
Even without YouTube, in November Google surpassed Yahoo for the first time as the second-most-visited site worldwide, comScore says.
Microsoft is the top site in comScore's worldwide rankings - fueled in part by downloads of Microsoft software updates. In the United States, comScore has Yahoo as the top site, with 130 million visitors, to 108 million for Google.
Yahoo has been the most visited Internet property in the U.S. for more than 10 years, thanks to its popular e-mail, instant messaging and directory applications. But it trails Google in revenue: Yahoo reported revenue of $4.5 billion in the first three quarters of 2006.
Google taking the No. 2 spot in worldwide traffic "is a big deal," Sullivan says. "Google's critics say the company is a one-trick pony, and is focused too much on just search. This just shows how powerful search is."
Only 10 percent of Yahoo's traffic comes from search, according to rival measurement firm Hitwise. At Google, meanwhile, 87 percent comes from search. Yahoo's top traffic generator is e-mail, at 33 percent.
Yahoo has struggled in the shadow of Google this year. Its revamped search advertising system was delayed until early this year. Its stock trades at around $26 a share, from more than $40 last January. And it has announced a restructuring to get back on track.
Earlier last year, Citigroup analyst Mark Mahaney predicted Google would top Yahoo and Microsoft in traffic even without YouTube. "It's a matter of math," he says. "The Internet population is growing at 10 percent a year, and Google's audience is growing at 9 percent to 15 percent," compared with 6 percent to 12 percent for Yahoo, and 4 percent to 7 percent for Microsoft. He also says Google's stock will hit the $600-a-share mark by the end of 2007. "The rise in traffic shows that the new applications they've been adding are being widely accepted," he says.
http://theadvertiser.gns.gannettonline.com/apps/pbcs.dll/article?AID=/20070103/TECH04/609070485/1001...
GOOG's Virtuous Cycle
[Safa Rashtchy] still believes the company's revenue will continue growing, thanks to expansion efforts such as Gmail, the company's free Web-based e-mail, and the map service Google Maps. He says those products will draw more users to Google and make its brand more meaningful beyond its core business as an Internet search engine. Piper Jaffray (PJC)... recently surveyed 337 Internet users, in which it found that 49% of respondents use at least one Google product aside from search. A quarter used at least two.
"While Google's partnership strategy and monetization improvement trajectory are well understood by investors, we do not believe investors fully understand the impact of Google's non-search related product extension strategy," Rashtchy wrote Jan. 3 in a note to clients. As a result, "consumer adoption of non-search-related products creates a virtuous cycle of brand affinity that drives incremental search volume." In other words, the more you use Gmail, share photos with Picasa, or get directions to a new club with Google Maps, the more likely you are to feel good about Google's free services -- and, by using them, eventually drive more cash to the company.
Another trend Piper Jaffray sees: search becoming a more important component of Web surfing. Whereas people once used a search engine for research or to locate a business, such sites are now becoming "the dominant navigation method" -- that is, essentially used as a browser -- by many, according to the brokerage's survey.
http://www.msnbc.msn.com/id/16469215/
Google Could Jump-Start Net Stocks
By Jim Cramer
RealMoney.com Columnist
1/4/2007 12:09 PM EST
Don't underestimate the umbrella value of Google (GOOG) . A move in Google helps everything from the pathetic Yahoo! (YHOO) to the screaming Akamai (AKAM) . It is a driver for a tech sector that has been moribund away from IAC/InterActiveCorp (IACI) : the Internet!
Google's a funny stock. It has captured the public's fancy and therefore is the key for this market's taking in more money. I believe it is overweighted in the retail clients' mindshare because of the captivation factor.
I am watching this run in Google like a hawk. I have no doubt that if this stock can push back over $500, the public's excitement about it -- and the Net -- will come roaring. The media love this story, perhaps because it is so embarrassing to the organizations they work for! (Except for, well, us.)
Just stay on top of this one.
Too good to not focus.
http://www.thestreet.com/p/_yahoo/rmoney/jimcramerblog/10330667.html?cm_ven=YAHOO&cm_cat=PREMIUM...
Got ya covered, webber!
It'll fare no better than the others.
Google Lawsuits Dismissed
2006-12-28
Google has won another case, even without fighting it, against a Madison based company, HyperPhrase Technologies LLC.
HyperPhrase Technologies LLC and its subsidiary, HyperPhrase Inc, had filed a lawsuit against Google citing that Google's AdSense and AutoLink products violate the company's patents.
U.S. District Judge John Shabaz dismissed the lawsuit in a 25 page ruling. The judge said that:
"AutoLink performs a completely different function in a different way to achieve a different result."
The judge also put aside the AdSense lawsuit as "nonsense." He said that:
"The product involves connecting two records which the AdSense statistically predicts hold a common interest for the reader. It has nothing whatever to do with a reference in one record to a second record."
http://www.internetfinancialnews.com/financialblogtalk/news/ifn-6-20061228GoogleLawsuitsDismissed.ht...
Google's biggest bull sets $630 share price target
Wed Jan 3, 2007 1:58 PM ET
SAN FRANCISCO (Reuters) - Wall Street's most bullish analyst on Google Inc., Safa Rashtchy of Piper Jaffray, on Wednesday said he had raised his stock price target on the Internet media leader to $630 from $600.
In a research note to clients, Rashtchy reaffirmed that Google remains his top large-capitalization stock pick for 2007 based on a belief that it will continue to gain market share from rivals in the Internet, software and media industries.
Other catalysts for the stock are likely to be earnings results and the contribution from new services such as the Google Checkout payment system and radio advertising, he said.
The $630 target represents a price-to-earnings multiple of 35 times the Piper analyst's 2008 earning estimate on Google.
A year ago, in early 2006, Rashtchy went out on a limb on Google by raising his price target to $600, far above other analysts.
The move initially sent the stock higher, but within weeks, concerns about mounting Internet industry competition led the stock to fall back dramatically from a high of $475 to $330.
Only in recent months have other analysts begun to set price targets in the high $500 range. In recent months, the stock has recovered, trading as high as $513 in late November.
The stock, which opened around $465 following the holidays was up $10 at $475 in mid-session on Nasadaq in 2007's first trading session.
http://today.reuters.com/news/articleinvesting.aspx?type=hotStocksNews&storyID=2007-01-03T185616...
Something to do with last year's stock winnings, dex...
Super prices for Super Bowl ads
CBS is looking to charge a record $2.6 million for a 30-second spot during this year's Super Bowl XLI.
http://money.cnn.com/2007/01/03/news/funny/superbowl_ads/index.htm?source=yahoo_quote
Bears in panic mode!
Emotions in Motion
By Cody Willard
RealMoney.com Contributor
1/3/2007 11:25 AM EST
What a way to start the year. The Nasdaq is up nearly 2% on the first trading day of 2007.
That's already fueling some buying panic from the bulls, who wonder why they've doubted tech's ability to lead this market in the last half of the first decade of the new millennium.
Meanwhile, of course, the shorts and bears are panicking in their own right, and that's juicing stocks further. Any bears, perma- or otherwise, who made it through the bull market of 2006 are wondering how they can start off 2007 lagging the Nasdaq by 300 basis points or more -- on the very first day. That has to be brutal.
The only trade I've made so far this year is buying some Google (GOOG) this morning. I feel a bit underexposed with this Nazz pop myself, but I'm not going to let emotions dictate my actions.
Don't let emotions dictate yours, either.
http://www.thestreet.com/p/_yahoo/rmoney/codywillardblog/10330351.html?cm_ven=YAHOO&cm_cat=PREMI...
The Year of the Bull
By Jim Cramer
1/2/2007 9:25 AM EST
Why can't it continue? 'Cause it went up too much? Because it borrowed from this year?
I don't buy any of that. Stocks were undervalued coming in if oil were to peak -- it did. They were undervalued if the Fed decided to stop rate hikes -- it did. And they were undervalued if the dollar fell and interest rates stayed low. And they did.
Whole swatches of stocks were radically undervalued because they had gone out of fashion when the true industrials were flying: stocks like Comcast (CMCSA) , AT&T (T) and Verizon (VZ) .
Plus, the decline of some competitors let others blossom: Ford (F) , Wal-Mart (WMT) , Whole Foods (WFMI) and Federated (FD) .
We keep thinking that the buyout bonanza has to end, not considering that it is demand driven, and the demand side is fueled by lots of private-equity money coming in. M&A? Not even a factor yet from Europe... that's this year.
Most of all, retail has stayed out of this market entirely. When that changes, you will see much higher prices.
There were some end-of-the-year disappointments: Research In Motion (RIMM) , Google (GOOG) and Apple (AAPL) . Sure seems like those, though, were pushed down. Look for them to bounce right back.
Once again, it will be phenomenally easy to stay bearish. It will be very difficult to stay bullish.
And the bulls will win.
http://www.thestreet.com/p/_rmct/rmoney/jimcramerblog/10330214.html