ABC...

At these levels...one of my highest conviction buys since March..

Last week, the Nasdaq showed volatility is not going away before November 3rd, as tax implications loom. When corrections occur, as well as highs, there tends to be a "overshooting" to upside or downside. The FAANG stocks showed weakness and questioning "where is support?". During this dip, I had to decide which FAANG I liked the most to put money to work and most confidently doubled down on Alphabet (GOOGL). Alphabet has been under appreciated because it had its first quarter of revenue decline, since inception. However, they beat on EPS, and displayed strong cloud and Youtube growth. 

 

As lockdowns around the world and in USA still persist, Google will be widely used browser for shopping, advertising, Youtube, election traffic and other online activities people do at home. A recent survey disclosed, Google was used by 1 in 3 consumers to compare online prices. Currently, the most impressive feat of Google is their revenue increases in the cloud and Youtube. Looking further out- their long term projects Waymo (autonomous driving) and Verily (healthcare), look promising for more market share for Google, diversifying their revenue concentration. We see the adoption of "going online" for many businesses, small to large cap, will spur Google's long term revenues in advertising and cloud adoption. Fundamentally, this is strong stock trading at 32x earnings and reports earnings on 10/29. Expectations are just under 43B and 11.00 EPS, will be watching for 2020 guidance confirmation as well. We have a price target of $1,680. 

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