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Alphabet earnings Q4 -stock down 5 1/2%
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You have to change your life
Posted: 31 January 2024 13:08:38(UTC)
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The share price fell $8 immediately but the figures look robust.

Analyst's pre-report expectations tend to be very close, as here - but the last quarter was met with a 10% markdown too. Those looking for a trading strategy to support the "overvalued USA" idea may want to think about playing around the quarterly earning report. Those focussed on P/E ratios note Alphabet's shares, which rose 58% in 2023, were trading at 22.26 times expected earnings, compared with a forward PE of 33.09 for Microsoft, 22.46 for Meta, 42.60 for Amazon and 27.73 for Apple.
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Markkus on 31/01/2024(UTC), Johan De Silva on 31/01/2024(UTC), Tom 123 on 31/01/2024(UTC)
Johan De Silva
Posted: 31 January 2024 13:38:50(UTC)
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At the end of 2022 Google had a P/E ratio of 19.3. I noted this back then as a value stock opportunity, but I was too engrossed in listening to Ruffer podcasts about liquidy issues and a global meltdown or something.
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John Bran on 10/07/2024(UTC)
Thrugelmir
Posted: 31 January 2024 13:49:17(UTC)
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Chickens coming home to roost. Markets are not the real economy.
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Tom 123
Posted: 31 January 2024 13:51:36(UTC)
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A PEG factor approach to highly valued stocks works when the earnings growth continues to rise year on year.

With the megacaps, what is the year on year earnings growth now? If we go back say 5 years, they had market growth to still capture, hence Apple going from $1trillion to $3trillion. That was based on capturing new market share.

But is that extra market share still there or are they too big to grow at the rate they once did?

I sense a few of the megacaps are now struggling to grow and therefore a lot of the recent share price increases was increase in P/E expansion as opposed to reflecting a share rise in response to continued earnings. Is this right or not?

High P/E multiples work when earnings growth is strong yoy. If it isn't that change in P/E on the upside can correct.
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Thrugelmir on 31/01/2024(UTC)
Thrugelmir
Posted: 31 January 2024 13:59:00(UTC)
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Tom 123;294573 wrote:

With the megacaps, what is the year on year earnings growth now? If we go back say 5 years, they had market growth to still capture, hence Apple going from $1trillion to $3trillion. That was based on capturing new market share.



$2 trillion of future profits. That was never going to be achieved in a short time frame. Apple share price has grown as passive investing has grown. In 2023 passive finally took over active. Momentum i.e. money has driven share prices upwards not investor sentiment towards individual stocks. Buy a global tracker the bigger stocks simply get bigger and bigger.

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Newbie on 31/01/2024(UTC), Harland Kearney on 31/01/2024(UTC)
Tom 123
Posted: 31 January 2024 14:13:41(UTC)
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Thrugelmir;294578 wrote:


$2 trillion of future profits. That was never going to be achieved in a short time frame. Apple share price has grown as passive investing has grown. In 2023 passive finally took over active. Momentum i.e. money has driven share prices upwards not investor sentiment towards individual stocks. Buy a global tracker the bigger stocks simply get bigger and bigger.



Yes agree to a certain extent. However 2022 they all fell hard so it cant be as simple as saying passive will always push the large caps up.

I think in a sustained bull market yes, the larger will get larger. Are we in that? I'm expecting much choppier zig zagging for the large caps as the tension between valuation and earnings plays out over several years.
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You have to change your life
Posted: 31 January 2024 15:01:15(UTC)
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Tom 123;294573 wrote:
A PEG factor approach to highly valued stocks works when the earnings growth continues to rise year on year.

With the megacaps, what is the year on year earnings growth now? If we go back say 5 years, they had market growth to still capture, hence Apple going from $1trillion to $3trillion. That was based on capturing new market share.

But is that extra market share still there or are they too big to grow at the rate they once did?

I sense a few of the megacaps are now struggling to grow and therefore a lot of the recent share price increases was increase in P/E expansion as opposed to reflecting a share rise in response to continued earnings. Is this right or not?

High P/E multiples work when earnings growth is strong yoy. If it isn't that change in P/E on the upside can correct.


You can check here, Tom:
Google Alphabet earnings Q4 2018:
https://www.sec.gov/Arch...oogexhibit991q42018.htm

In summary EPS five years ago 0.64 cents, now $1.64. So pretty much in lockstep with the share price advance.

I can supply Apple as well or you can just as easily work it out yourself from the link.
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Johan De Silva on 31/01/2024(UTC)
Tom 123
Posted: 31 January 2024 15:12:16(UTC)
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You have to change your life;294601 wrote:


You can check here, Tom:
Google Alphabet earnings Q4 2018:
https://www.sec.gov/Arch...oogexhibit991q42018.htm

In summary EPS five years ago 0.64 cents, now $1.64. So pretty much in lockstep with the share price advance.

I can supply Apple as well or you can just as easily work it out yourself from the link.


That doesn't answer my question. Of course the earnings now are higher than in 2018. the share price has banked that difference..

I'm talking going forward. Where is the market to grow.

So from Macrotrends:
https://www.macrotrends....nings-per-share-diluted
$5.61 EPS in 2021, $4.56 in 2022, $5.11 EPS in 2023.

For Apple:
https://www.macrotrends....nings-per-share-diluted
$5.61 2021, $6.11 2022, $6.13 2023. Again the share price has grow far quicker than the growth in earnings, that equates to P/E expansion.

From what I can see, a slowing or steadying of earnings. Not double digit yoy. Which is understandable, how much bigger can they grow.

So for high multiple PEG investing you need mid / small caps that can sustain that growth rate.
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You have to change your life
Posted: 31 January 2024 15:22:53(UTC)
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Ah, Tom, you want speculation,. Well we don't know the future. Alexa tells me Mystic Meg died last year.
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Thrugelmir
Posted: 31 January 2024 15:22:59(UTC)
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Tom 123;294585 wrote:
Thrugelmir;294578 wrote:


$2 trillion of future profits. That was never going to be achieved in a short time frame. Apple share price has grown as passive investing has grown. In 2023 passive finally took over active. Momentum i.e. money has driven share prices upwards not investor sentiment towards individual stocks. Buy a global tracker the bigger stocks simply get bigger and bigger.



Yes agree to a certain extent. However 2022 they all fell hard so it cant be as simple as saying passive will always push the large caps up.



In the US alone there are now 334 ETF's that contain Apple. Bottom line is that it is mathematical. New money being invested will be allocated in the greatest proportion to the largest holding.

An old but relevant statistic. In 2021 90% of total global share trades were conducted in just 110 stocks.

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Harland Kearney on 31/01/2024(UTC)
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