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  • Apple iOS Ad Blocking: Google's Apocalypse Now  [View article]
    More like ~20% if you strip the currency effect...

    People don't do the work here and make big claims about investing with little or no facts and often wrong. I hate myself for wasting my time here when only a fraction of people actually reading the 10Qs of the companies they talk about...
    Aug 20, 2015. 06:49 AM | 1 Like Like |Link to Comment
  • Apple iOS Ad Blocking: Google's Apocalypse Now  [View article]
    Display ad on mobile does not work! its price is very low because users only click on it by accident and the user experience is terrible as you all described! for that reason it is a very small part of GOOGL mobile display revenues, most display ad revenues comes from desktop and GOOGL derives mobile revnues from search mostly, you should listen to the latest earnings call of Priceline, the number 1 client of GOOGL.

    So I have no opinion on performance impact for Safari, I don't even use it, I am sure ad-blocking will become big although it will take much longer than you think, both on Desktop and mobile however GOOGL has already whitelisted their search advertising and everyone in the Industry (Facebook, GOOGL, ad-tech companies) are cutting deals with ad-blockers to develop native advertisements both on browser and in-apps.

    In a nutshell, it shouldn't weigh on their results. Advertising companies are already adapting to it. Think about it, Advertisements that users did not want or found intrusive (pop-ups, display ads) are low-margin business for the industry with click-through rates and low conversions... It is not of interest for the ad-industry.
    Aug 19, 2015. 11:16 AM | 3 Likes Like |Link to Comment
  • I Was Right About YouTube: My Reaction To Google's Quarter  [View article]
    Completely agree. Yet here they don't sell the shares to the market, therefore GOOGL never cashes-in the issued stock so why should it cash out the stock? Basic accounting teaches you a debit for acredit and if there is no credit why would you put a debit.
    It is well summarized by Damadoran, the barter system is between the company and its employees as they are compensated in shares and not cash they are taking a risk and will make a loss or a profit.
    Jul 22, 2015. 11:46 AM | Likes Like |Link to Comment
  • I Was Right About YouTube: My Reaction To Google's Quarter  [View article]
    I am saying that Ruth Porat is paid $70 Mil of which 1% is paid by GOOGL and 99% is paid by shareholders through dilution... I am also saying that when you calculate FCF per share you are essentially double counting the SBC in both the shares and the FCF. Same thing when yoou look at the price to FCF (which you did earlier), the market cap already reflects the share dilution and the mechanical price drop that goes with it and then you are counting it AGAIN in the FCF... It just doesn't make sense!

    There is only one definition of cash and when GOOGL pays its employees through SBC it avoids paying cash and the shareholder is bearing the cost: Share dilution, lower EPS, lower price of the stock...

    Tell all the startups that are only remunerating their developpers and the key management through SBC exactly BECAUSE they have no cash that they are actually spending loads of cash and will therefore be insolvent... Well nope, that is exactly the point, dilute the shareholders and keep the cash intact... Basics really...
    Jul 22, 2015. 11:33 AM | Likes Like |Link to Comment
  • I Was Right About YouTube: My Reaction To Google's Quarter  [View article]
    But that's simply not true, although I have done a lot of accounting, I am not an expert on Cash Flow manipulations, yet with a bit of research, what you are saying is simply not true.

    First of all, Stock compensation is NOT a cash expense, and this is the Basics... Even if GOOGL was selling the shares on the market and then giving the cash to employees (which is not the case, employees decide or not to vest their shares, not GOOGL) then the cash would basically go from Investor to GOOGL to the Employee but it is not booked in the Cash flow statements: and especially not in the operating cash flow!
    Please feel free to show me where the entry is for Cash for stock compensation? Nowhere, which is why you add it back in the OCF...
    And finally if that was the case then all tech companies' Cash flows would be so grossly overstated... The accounting rule would just be ludicrous!

    Second of all, Cash flow is significantly harder to overstate than Net Income (part of the reason why "Cash is king") and you can overstate them in fewer ways than the P&L ( P&L is loaded with ludicrous accounting rules hence all the adjustments in the US...):

    1) Delay or recognize some Operating Cash Flows too early, making Quarter to quarter overestatements/unders... => This reverts from 1 quarter to another however and is a way to make 1 quarter look better.
    If this is the case here than you can strip the deferred tax liability assuming it is just a Quarterly change that will revert next quarter (this is what I have done).

    2) Changing accounts payables or accelerating collection of receivables are the most common ways of overstating Cash flows and again this can only be done temporarily and doesn't seem to be the case for GOOGL (very stable).

    Overall it is very difficult to overstate Operating Cash Flows and as you can see Free Cash Flow conversion has consistently been around 80% of Net Income for Google which points toward 2 things:
    a) Very conservative Cash Flows (but as we said, it's very hard to overstate/understateCash Flows)
    b) Overstated P&L (stock based compensation being responsible in my view)

    Googl's P&L is defintely something I restate in my model as the company does not hesistate to prop up its adjusted EPS and the market knows it. However Cash flow statements are sane and Pichette was not a magician conspiring with the US largest auditing companies... Sorry for the disappointment.
    Jul 22, 2015. 06:25 AM | Likes Like |Link to Comment
  • I Was Right About YouTube: My Reaction To Google's Quarter  [View article]
    Thats a proper analysis, although I disagree. I forecast $15.8bn FCF for the FY 15, I don't see why you would strip stock compensation which is not a cash item and is already reflected in the share dilution? I agree with the deferred tax liability which propped up FCF but stripping it out would still give me a FCF of $13.9 bn...
    Since the company is not worth $500 bn but $440 bn, the P/FCF is around 31.2 times. It is expensive but then it is all about what you think the prospects are for the company... I personnaly don't find the number irrational and am willing to pay 6 month forward 30 times FCF if the core business continue to grow so steadily over the next few years and the company adresses its spending issues announced in the results...
    Jul 21, 2015. 12:53 PM | Likes Like |Link to Comment
  • Does Google Have Any More Upside?  [View article]
    Yes analysts all over the world and for every company in the wolrd strip the currency effect to see how the business is actually doing. Think about it, if you sold 30% more compared to last year but currency moved 30% against you, I would still buy the business because there is clear demand for the product and currency moves are not related to the undelrying business performance => i.e. they do not reflect the operational performance.
    This applies to Google and Apple and ... every... single... company...
    Welcome to the investment world!
    And yes all those companies report constant currency numbers, whether currency is atailwind or a headwind, including GOOGL.

    Just use your common sense, if GOOGL was growing at 11% from 22% last year the stock would have fallen 30% not the other way around...
    Jul 21, 2015. 12:04 PM | Likes Like |Link to Comment
  • Google A Winner: Why The Good Outweighs The Bad  [View article]
    Okay this reply does not deserve an explanation around organic growth and constant currency numbers.

    Good luck with the rest of your investments - you clearly have no idea what you are doing
    Jul 21, 2015. 11:46 AM | 1 Like Like |Link to Comment
  • Google A Winner: Why The Good Outweighs The Bad  [View article]
    I really hope you can learn to do your research properly ...
    Feel free to explain how the revenue growth is collapsing?
    And I hope you get a better grasp of how and why the stock prices of AAPL and GOOGL moved like they have because this chart explains a good part of the movements...

    http://bit.ly/1MmteTA
    Jul 21, 2015. 10:48 AM | 1 Like Like |Link to Comment
  • Google A Winner: Why The Good Outweighs The Bad  [View article]
    The painful part for a stock is ging for double digit revenue growth to single digit revenue growth. At this rate, if they continues as they have over the last 3-4 years, this will not happen before 2020...

    Can you please provide the basis for your thinking of how they go from 22% organic growth 4 years ago to currently 18% organic growth to "growth being over"?

    How can you put random price targets like that as well, I mean seriously can I please rent your crystal ball?
    Jul 21, 2015. 10:31 AM | Likes Like |Link to Comment
  • Google A Winner: Why The Good Outweighs The Bad  [View article]
    $6 billion will obviously hurt the stock and EPS but it is a very short-term view as it will be considered an exceptional and be stripped out of the adjusted EPS... This will never impact the stock for more than a couple of weeks/months (look at companies like MHFI and MCO, the first took a $2bn fine and the second is exposed to a similar risk yet it has little impact on the stocks...) actually there is often a market relief from knowing the amount of the fine.

    Key performance indicators have not changed this quarter nor the previous one, organic growth has only very slightly accelerated by maybe ~1% and those are the usual quarterly variations, it can be the opposite next quarter.

    GOOGL is still seeing strong competition in search from Firefox switching search engine and potentially AAPL moving away in September which could definitely impact the business & the stock. Same thing from the iPhone squeezing Samsung and presurring the Android ecosstem (the profitable part of course).

    But again my analysis is positive for GOOGL in the long run, their growth rate is very resilient, they are clearly benefitting from mobile, and Youtube seems to be doing well with a lot of potential ahead in my view from branding and TV ad spend. Then there is Android (the next billion users is for Android not AAPL), Google Play, IOT, Android TV box sets for digital targeted TV advertisings and the moonshots...

    Don't take this the wrong way, I have read much more superficial analysis than yours on this website but you should try and think about the core-business and the longe-term in my view.
    Jul 21, 2015. 10:27 AM | Likes Like |Link to Comment
  • Does Google Have Any More Upside?  [View article]
    Reporting GAAP earnings is a legal obligation that every company must comply with - including GOOGL.
    In addition to that, most companies publish Non-GAAP earnings which exclude one-off items and often sock compensation. This is not called "cooking the books", companies do it to reflect the performance of their core business excluding one-off items such as a lawsuit or business sales etc... and all adjustments are thoroughly detailed.
    I personnaly disagree with GOOGL as I consider stock compensation to be part of their business model (attracting top talent in the world) and therefore I include it back in my numbers, you should just do the same.

    If this is your basis to recommend selling a stock you should really do something else.

    Also, the Motorola patents are now booked at $4.4 bn yes, and they are probably not worth that much yes, and Motorola was a bad acquisition yes - I agree with all of that, however we are talking small numbers for GOOGL... $600M is ~5% of this year's CAPEX... The acquisition had strategic value but ended up being very expensive for GOOGL and its shareholders, everyone knows that and the stock suffered for it (went up sharply when they cut their losses and announced the sale). Other acquisitions like Youtube ($1 Bn), or DoubleClick have been huge successes...

    This is part of management's track record, take it or leave it, but again recommending a SELL because their Motorola patents of $4.4 bn are overvalued when the GOOGL balance sheet is $140 Bn... It is just not material for the company's future.
    Jul 21, 2015. 08:52 AM | 1 Like Like |Link to Comment
  • Does Google Have Any More Upside?  [View article]
    So first you talk about GOOGL class A, now it's GOOG class C, just to support your numbers ?? Yes GOOG went down 1.47% yesterday which is exactly what you said would happen right? the massive sell-off? or wait is that for today....?

    Look I am not trying to tell you you're right or wrong because I have no idea where the stock wil be tonight and the truth is nobody does... This is why you take a long term view and eventually the stock will go where the financials go depending on the outlook for the company.
    Unfortunately nothing from your comments seem to be basd on any kind of anlaysis and/or fundamentals and you seem to miss the point around the most basic stuff like the top line growth of GOOGL or the strategy behind some acquisitions.

    You should consider getting advised by a professional...
    Jul 21, 2015. 03:29 AM | Likes Like |Link to Comment
  • Does Google Have Any More Upside?  [View article]
    Sorry but this is why investing is a full time job and it saddens me to see so many investors making such misguided statements:

    - Constant currency growth was 18% in Q2 2015 and ~21% in Q2 2014. This is the growth rate after stripping the currency translation impact, so excluding the strong USD which has penalised US companies and favoured EU companies recently.

    I am not arguing that GOOGL will go up or down tomorrow or the day after, I am just suggesting you should use real/fundamental numbers for your analysis especially if this is your one and only "important reason" on which you base a recommendation and a price target
    Jul 20, 2015. 11:42 AM | 1 Like Like |Link to Comment
  • A New Reason To Like Google  [View article]
    Sorry but this is why investing is a full time job and it saddens me to see so many retail investors losing money making such simplistic and misguided "shortcuts":

    - Constant currency growth was 18% in Q2 2015 and ~21% in Q2 2014. This is the growth rate after stripping the currency translation impact, so excluding the strong USD which has penalised US companies and favoured EU companies recently.

    I am not arguing that you are right or wrong, I am just suggesting you should use real comparable numbers especially if this is your "one important reason"...
    Jul 20, 2015. 05:33 AM | 1 Like Like |Link to Comment
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