Have Google, Apple and Amazon hit bottom?
Posted
Dec 16 2008, 12:45 PM
by
Kim Peterson
Rating:
Venture capitalist Fred Wilson thinks we've seen the bottom with Google, Apple and Amazon, and he's been aggressively buying the stocks.
"You've got to put money to work if you want to make some of that lost capital back, and I think the titans of web tech are one good place to do that starting in early 2009," he writes on his blog.
Wilson has some good thoughts on Google, whose price targets are being revised downward as analysts start to think growth will slow. But the Street also thinks Google will cut operating costs next year by $500 million, and still deliver at least $10.8 billion in earnings (that's before you factor in taxes, interest, depreciation and amortization).
If you include Google's cash, the company's market value translates to $400 a share, he writes. Google is trading today at the $317 range.
"When investors start looking at places to put money back to work in 2009, I wouldn't be surprised to see Google get some attention," he writes. "With just one significant revenue stream, its forecasted to generate over $10bn of cash flow."
I agree with Wilson's thoughts on Google and Apple. Both companies are stars whose prices have dropped so far that they're an irresistible buy. But Amazon? With all the woes in the retail industry right now, I'm not sure Amazon's $51 share price is justified.
Related reading:
Why Apple is the best stock in the world
Apple finally takes a big fall
Google on fire
Google stands to gain more ad dollars
Amazon downgraded despite Kindle boost
