GOOGLE Trading - Trade GOOGLE CFDs with live News, Price & Analysis Charts
Google launched its initial public offering (IPO) on 19 August 2004 in which 19,605,502 shares were issued at a price of $85 per share. Morgan Stanley and Credit Suisse acted as underwriters for the process, and the IPO raised $1.67 billion – which caused Google’s market capitalization to increase to over $23 billion. In October 2015, Google became the biggest subsidiary of the holding company Alphabet Inc, which was set up by Page and Brin to make the business operations of Google cleaner and more accountable. Other companies and products – aside from Google – which are incorporated under Alphabet are Google Maps, Android, YouTube, and Google Chrome. As the holding company for Google and other subsidiaries, Alphabet Inc. is one of the largest companies in the world.
But what are its fundamentals, what are the latest analysts' ratings and how can you take a position on its shares?
Google Trading - The Basics
As part of its IPO, Google was listed on the NASDAQ exchange under the ticker GOOG. Today its holding company, Alphabet, still trades under the GOOG ticker for class C shares and the GOOGL ticker for class A. Alphabet’s share price is driven by its brand recognition. In fact, Google is currently ranked as the second most valuable brand in the world after Apple based on market cap.
Equally, the price of Alphabet shares is also driven by the continued growth of the technology sector. Many traders see the online world as a key opportunity to watch in the coming years, with innovations such as artificial intelligence (AI) predicted to take the world by storm.
Google Trading with CFDs
Trading Google via derivatives is slightly different from investing in them because you won’t own any shares outright. Instead, you are speculating on the direction in which you think Alphabet’s share price will move. Google trading means going long if you expect the price to rise or going short if you expect the price to fall.
If you decide to trade Google shares, you have the option to trade on leverage. This means you put down a small deposit – known as margin – and you receive full market exposure. But you should bear in mind that leverage increases your market exposure because your profit or loss is based on the full size of your position, not the deposit. This means that while you can realize a greater profit, you can also incur a much heavier loss.
A contract for difference (CFD) is a financial derivative with which you agree to exchange the difference in the price of an asset – in this case, Alphabet stock – from when you opened your position to when you close it.
Google Trading – The Fundamentals
Before you choose to start Google trading, it is important to carry out a fundamental analysis to assess whether they are currently overvalued or undervalued. Once you have carried out your assessment, you can decide which position you would like to open.
Investors use return on equity to determine how well a company produces positive returns for its shareholders. Analyzing ROE can help you find companies that are profit generators. ROE is calculated by dividing net income by average shareholders’ equity. A continual increase in ROE is a good sign to investors.
GOOG's Return on Equity of 30.47% is among the best returns in the industry. GOOG outperforms 82% of its industry peers. The industry average return on equity is 10.59%. *
A common method of analyzing a stock is studying its price-to-earnings ratio. You calculate the P/E ratio by dividing the stock’s market value per share by its earnings per share. To determine the value of a stock, investors compare a stock’s P/E ratio to those of its competitors and industry standards. Lower P/E ratios are seen as favorable by investors.
GOOG's Price/Earnings Ratio is 20.80, which indicates an expensive current valuation of GOOG. *
A company’s earnings per share show how efficiently its revenue is flowing down to investors. An increasing EPS is taken as a good sign by investors. According to NASDAQ, the higher a company’s EPS, the more your shares are worth, because investors seek to purchase a company’s stock when earnings are high.
GOOG’s in Q1 2022 was $24.62. *
The Earnings Per Share have been growing by 26.72% on average over the past 5 years. *
The Earnings Per Share are expected to grow by 13.86% on average over the next 5 years. *
No dividends for trading Google!
*Source: Yahoo Finance
Google Trading – The Ratings
Analysts have set a mean price target of 3538.88. This target is 51.03% above the current Google shares price ($2342).
GOOG was analyzed by 61 analysts. The buy percentage consensus is at 86. So, analysts are noticeably confident about trading Google.
In the previous month, the buy percentage consensus was at a similar level.
GOOG was analyzed by 61 analysts, which is quite many. So, the average rating should be quite meaningful.
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