Google Shares Price: Is it Time to Sell Google?

Google Shares Price: With Google Inc (NASDAQ:GOOG) shares going up, up, and away, many people feel that now is the time to buy more stock in the company. After all, there are quite a few who feel that $1,000 is in the cards.

Google is one of the hedge fund industry’s most popular stock picks, and it’s always important to pay attention to the smart money (see just why here).

At tempting as this may be, there are others who realize that Google could be following in the same footsteps as Apple. You know the story. It appears that nothing can go wrong, but soon enough the company hits a glitch in the road and the stock price begins to rapidly decline.

CNN Money took a closer look at the potential for this to happen to Google Inc (NASDAQ:GOOG). More specifically, the article talks about the thoughts of Oracle Investment Research’s Laurence Isaac Balter. This is the guy who downgraded Apple on August 21, 2012, just about five weeks before the stock took a huge dive.

Here is what Balter had to say:

“As we begin to hear the rumblings of $1000 target prices and cheerleaders in pom-poms, we are raising the target price only slightly from $670 to $700 to reflect earnings per share growth, but we still think you are overpaying.”

Harsh words when it appears that Google Inc (NASDAQ:GOOG) is doing quite a bit right at the present time.

Here are some points touched on in the CNN article:

“From a P/E perspective, GOOG is the 10th most expensive in the S&P 100 at 24.6x.

At 3.8x P/Book, it’s the 31st most expensive.

With a PEG ratio of 1.20, it’s trading at a premium of its growth rate, whereas Apple’s PEG ratio is just 0.55x (the 5th lowest in the entire S&P 500).

Over the past 5 years, GOOG has been compounding retained earnings at only 6.74%, whereas Apple has been nearly double that at 11.88%.

GOOG’s return on Assets has been declining at -6.47%/yr compounded rate, whereas Apple has been increasing by 11.7%/yr.”

Do you agree with what Balter has to say about Google Inc (NASDAQ:GOOG)? Share your opinion in the comment section below.

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DISCLOSURE: I have no positions in any stock mentioned.

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