Shares in Internet search giant Google are a "must own" as the company's earnings are expected to accelerate over the next two years, says Vestact.
The group - with more than 50 000 employees across the globe - published second quarter numbers after Thursday's close of market. "Google had a great quarter with revenue up 22% year on year, at $16 billion," said CFO Patrick Pichette.
Net income, calculated according to Generally Accepted Accounting Principles (GAAP), edged up slightly to $3.42 billion, from $3.23 billion, while non-GAAP net income was $4.18 billion, compared to $3.36 billion a year ago. Google brought in $5.63 billion in net cash, and - although it expects to continue to invest heavily - ended the period with cash of $61.2 billion.
"We are moving forward with great product momentum and are excited to continue providing amazing user experiences, with a view to the long-term," says Pichette.
Google has been buying seemingly unrelated companies at an ever-increasing rate to own the future, and the customer of the future. It recently added Songza - its bid to play a bigger role in the fast-growing online music business - to its long list of acquisitions. Songza joined the likes of a mobile alarm clock developer, a company that makes robots, a group that turns out smoke alarms, and Internet and cloud computing companies on its list of 160 takeovers in the past 13 years.
Its spending spree, which it can well afford, is accelerating as it deepens its ability into tools that will enable a connected world, and applications that will plug into that future. In total, since 2001, Google has bought 160 companies, with 57 of these buys coming in the last three-and-a-half years, at a rate of one purchase a week, according to Wikipedia.
Vestact says Google will have many more opportunities to drive revenue, as the Internet of things will offer many advertising platforms, "from your fridge, to your car, to buildings, to everything in-between". Other opportunities include its app store, as well as fibre. "We continue to add to what is an amazing business now and what I consider the General Electric of the 21st century and a must own."
However, adds Vestact, Google is a pricey share, as it does not pay dividends - being a growth business - and trades on a 27 forward price-to-equity ratio. "This is one of the most fabulous investments that you can make, of course not for income and it is certainly on a forward basis."
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