Will Apple Inc. (AAPL)’s Nemesis Hit the Mythical $1,000 Mark? – Google Inc (GOOG)

Page 1 of 2

Apple Inc. (NASDAQ:AAPL) had a great run till last September and the phenomenal increase in stock price led investors to believe that it would cross the $1,000 mark. However, a U-turn came and the stock started plunging, declining nearly 40% in just five months time. Currently, the buzz of crossing the $1000 mark surrounds Google Inc (NASDAQ:GOOG). Let’s see the means that can help it reach that level.

Apple Inc. (NASDAQ:AAPL)The means to reach $1,000

The company has a diverse portfolio of businesses to offer. It is mainly known for its search engine that helps people to get information about almost everything on the internet. The company is currently dominating the online advertising market that currently helps it to generate 87% of its current revenue.

Currently Google Inc (NASDAQ:GOOG)’s Android is dominating the mobile apps market and in total there are over 500 million Android activated devices till September 2012. Moreover, around 1.3 million new devices on an average are activated daily. Android is going to extend its periphery into “smart appliances,” which will simplify communication through interconnected devices. Currently Samsung and Panasonic are selling appliances controlled by Android, and Google’s unrestricted stand should improve its bottom line.

Rumors are currently doing rounds that Google Inc (NASDAQ:GOOG) will soon be launching its own handset named Motorola X. Motorola’s acquisition acts as an insurance policy for Google against Samsung’s dominance of the Android platform, which currently accounts for 40% of the entire Android device sales. The success of “could be Google Inc (NASDAQ:GOOG)’s own mobile” would increase its current revenue and improve its bargaining power with Samsung.

A robust financial position

The first thing that is hard to go unnoticed in Google Inc (NASDAQ:GOOG)’s balance sheet is the $48.1 billion cash and short-term investment. The company generated a free cash flow of $13.3 billion in 2012. Its cash heap represents almost $150 a share which can be utilized for a buyback program or a huge dividend. Google currently has 1/6th of its stock price in cash which should attract value-oriented investors towards it.

A current ratio of 2:1 is supposed to be ideal because then the company is well positioned to finance its short-term obligations. Google Inc (NASDAQ:GOOG)’s current ratio is 4.23 times, which further strengthens its financial position. Further the company has very low net receivables representing about 16% of its sales which is consistent over the period of last three years implying that its sales are well converted into cash.

The company’s balance sheet has intangible assets worth $7.5 billion, of which 80% are patents or licenses. These assets will be written over in a period of 8 to 10 years so they will not affect the company’s financial position much. Moreover, patents means that the company can restrict the entry of competitors placing itself in an advantageous position.

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

The 10 Most Peaceful Countries in the World

5 Big Reasons Communism Failed

The 15 Most Famous Carl Icahn Quotes

10 Scary Animals that are Actually Harmless

The 8 Most Famous Singer-Actors in Entertainment

The 10 Longest Wars of All Time

The 13 Worst Looking Foods that Taste Great

The 6 Most Gruesome Injuries Suffered During a Sports Match

The 20 Biggest Contracts in MLB History

The 7 Worst Blown Calls in Sports History

7 Free Ways to Advertise Your Business Online

The 18 Best R&B Songs of the 90’s

The 10 Most Dangerous States to be a Cop

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!