Here’s What Makes Alphabet (GOOG) a Good Long-Term Investment

Baron Funds, an asset management company, released its “Baron Global Advantage Fund” second quarter 2022 investor letter. A copy of the same can be downloaded here. In the second quarter, the fund fell 32.3% compared to a 15.7% decline for the MSCI ACWI Index and 20.2% for the MSCI ACWI Growth Index. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.

Baron Funds discussed stocks like Alphabet Inc. (NASDAQ:GOOG) in the second quarter investor letter. Alphabet Inc. (NASDAQ:GOOG) is a multinational technology company headquartered in Mountain View, California. On September 8, 2022, Alphabet Inc. (NASDAQ:GOOG) stock closed at $109.42 per share. One-month return of Alphabet Inc. (NASDAQ:GOOG) was -10.79% and its shares lost 22.90% of their value over the last 52 weeks. Alphabet Inc. (NASDAQ:GOOG) has a market capitalization of $1.422 trillion.

Here is what Baron Funds specifically said about Alphabet Inc. (NASDAQ:GOOG) in its Q2 2022 investor letter:

“Google, now known as Alphabet Inc. (NASDAQ:GOOG), is another good one. A well-established, blue-chip leader with a market capitalization of over $200 billion, the stock was trading at a multiple of 39 times next year’s consensus earnings estimates at its peak in 2007. During the financial crisis of 2008-2009, Google’s stock price declined 65% (from a peak of $369 to $128 at a bottom) and was trading at a P/E multiple of 14 times.

Once it bottomed out, the stock price more than doubled in a year and is up 16 times since then. Google’s net income grew from $4.2 billion in 2007 to $76 billion in 2021, compounding at 23%, which in our opinion is the primary reason for the performance of the stock.”

Photo by Kai Wenzel on Unsplash

Alphabet Inc. (NASDAQ:GOOG) is in 6th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 153 hedge fund portfolios held Alphabet Inc. (NASDAQ:GOOG) at the end of the second quarter which was 160 in the previous quarter.

We discussed Alphabet Inc. (NASDAQ:GOOG) in another article and shared L1 Capital International’s views on the company. GOOG shares declined by double digits since Baron Funds made the above comments and currently trade at $88. Even though we think the market has another 10-15% downside risk, it may still be a good idea to initiate a small position in GOOG shares if you don’t have any holdings.

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Disclosure: None. This article is originally published at Insider Monkey.