July 25, 2012
The following video is part of our "Motley Fool Conversations" series, in which analyst John Reeves and advisor David Meier discuss topics relating to their 10-Bagger portfolio.
Google reported strong earnings last week, and its stock is still worth buying, according to John and David. Excluding the impact of the Motorola acquisition, revenue still grew 21%. In search, clicks were up 42% while cost-per-click declined 16%. Google clearly remains the leader in search, ahead of Yahoo! and Microsoft’s Bing. But the big news is that Google’s Nexus 7 is seeing heavy demand. I do not think it will displace Apple’s iPad, but Amazon.com had better make some big improvements to the Kindle Fire. Even with all the good news, the stock is cheap. The company trades at just over 12 times free cash flow, and is still growing fast. Add in a rock-solid balance sheet, and Google is worth buying.
In addition to Google, we're pretty excited about Apple right now. It's an extremely influential company in technology and has delivered market-smashing returns for those lucky enough to invest in it. However, with the impending release of the iPhone 5 and Apple TV on the horizon, the stakes have never been higher for the company. If you’re looking for a recommendation on how to play Apple along with continuing updates and guidance on the company whenever news breaks, we’ve created a brand new report that details when to buy and sell Apple. To get started, just click here now.