In the technology sector, Alphabet Inc. (NASDAQ:GOOGL) is one of those "forever" stocks that continues its slow and steady climb higher.
Despite COVID-related concerns about advertising spending, the company's share price has more than rebounded from its March lows. The company is now trades around all time highs. This is a company many investors seem to want to pick up at any discount, so those who bought the recent dip have done well.
I still think Alphabet is a great long-term core portfolio holding for most investors. Like many of its tech peers, Google's parent company has spent decades reinvesting its growing cash flow into its core business, providing outsized returns to investors. Alphabet has supplemented its strong core search and advertising business with acquisitions over the years such as that of YouTube and various add on acquisitions in the cloud computing space, two key growth drivers for this company over the long term .
Fundamentally, Alphabet does trade at an otherwise expensive multiple. That said, when one compares this multiple (around 22 times 2021 earnings) with a compounded annual growth rate of 19% historically, the company shows it has one of the best PEG ratios of its peers.
Should we see any sort of meaningful deterioration in Alphabet’s stock price in the near future, assuming downside volatility kicks in again, Alphabet is a company I would encourage investors to pick up at a discount.
Invest wisely, my friends.
Tech Insider
