Google Inc (GOOGL): A Great Company With Issues, Says Scott Fearon

Google Inc (NASDAQ:GOOGL) is still a great company, albeit with its very own share of issues, author Scott Fearon said in a discussion on CNBC.

The discussion about Google Inc (NASDAQ:GOOGL) centered on the technology giant’s ability to generate cash and the current state of the industries it is in. Dennis Berman of The Wall Street Journal also added to the conversation.

“It’s clearly not a dead company walking, and it’s not a company I’ve ever visited, but it’s a great company with issues,” Fearon said.

Fearon, author of the book “Dead Companies Walking,” admitted that he is a “small stock junkie” hence he has yet to visit Google Inc (NASDAQ:GOOGL) and talk to its management.

As for the issues, he said that he thinks the company’s stock was flat last year relative to the five biggest technology companies. Part of this is because the company invests so much in its numerous high-tech projects like its driver-less cars.

According to Fearon, the company generates about $50 billion in revenues and about $10 billion in cashflow but they spend so much on research and development instead of returning its stash of capital to investors which is what similar tech behemoths have started to do. This may worry some investors, he said.

Meanwhile, Berman also said that Google Inc (NASDAQ:GOOGL) may have problems like the move to mobile and how search has transferred to apps, but he still thinks it’s a “pretty vibrant” company.

Saying there’s a lot going for the company, he noted that its stock price is traded at about 10 times forward EBITDA which he says is not a “crazy” number.

Andreas Halvorsen’s Viking Global owned 923,500 Class A Google Inc (NASDAQ:GOOGL) shares by the end of 3Q2014.