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Google Passes Exxon to Become Second-Most Valuable U.S. Company

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Re: Google Passes Exxon to Become Second-Most Valuable U.S. Company

#81

Post by pswenson »

frogpelt wrote: post #33

I have to say I don't understand companies that have very little in the way of tangible assets being valued higher than companies that have mounds of tangible assets. For instance, Exxon-Mobil has $347 billion in tangible assets while most of Google's value comes from its brain trust and the vision of its leadership. The same could be said of Apple though they do have $40 billion in cash. In other words, if both comp…

appl had ~$160B in cash as of their earning report last week: http://www.bloomberg.com/news/2014-01-28/apple-s-160-billion...

Re: Google Passes Exxon to Become Second-Most Valuable U.S. Company

#82

Post by JonFish85 »

haberman wrote: post #74
brudgers wrote: post #32

Whoopdee shit. If Exxon and Google were both liquidated today which one would produce more cash? Google share prices reflect a speculator's premium. Exxon's better reflect the value of the underlying assets.

By all means sell Google and buy Exxon. Check back with us in 10 years about how that went. > Exxon's better reflect the value of the underlying assets. That's like valuing a car based on the price of the steel it contains instead of where it can take you.

> By all means sell Google and buy Exxon. Check back with us in 10 years about how that went.

I am actually going to try to track this (and I don't mean that in a bad way). I am honestly curious about this over the next 10 years.

Re: Google Passes Exxon to Become Second-Most Valuable U.S. Company

#83

Post by ihaveajob »

MichaelApproved wrote: post #79
throwaway_yy2Di wrote: post #48

Yet it's so small : XOM ('12) GOOG ('13) Revenue $453 B/a $60 B/a Profit $45 B/a $13 B/a Market cap $393 B $394 B https://en.wikipedia.org/wiki/Google https://en.wikipedia.org/wiki/ExxonMobil (101 for anyone who doesn't know this: revenue is how much you sell, profit is what's left over for shareholders, market cap is how much shareholders think that profit stream is worth). Relevant: check out wikipedia's rankings o…

I believe one reason why Google and even Apple are able to surpass Exxon is because Exxon pays out a large portion of its profit in dividends while Google and Apple retain much of theirs in bank accounts as assets. If Exxon didn't pay a dividend they'd easily be the largest company in the world with regards to market cap.

I'm not sure that is a correct line of logic. Often, companies pump their stock prices by handing over dividends. That's a sign of a mature company, which can't expect to grow much, but is still valuable to its shareholders if it can provide results in any other way.

Re: Google Passes Exxon to Become Second-Most Valuable U.S. Company

#84

Post by suyash »

throwaway_yy2Di wrote: post #48

Yet it's so small : XOM ('12) GOOG ('13) Revenue $453 B/a $60 B/a Profit $45 B/a $13 B/a Market cap $393 B $394 B https://en.wikipedia.org/wiki/Google https://en.wikipedia.org/wiki/ExxonMobil (101 for anyone who doesn't know this: revenue is how much you sell, profit is what's left over for shareholders, market cap is how much shareholders think that profit stream is worth). Relevant: check out wikipedia's rankings o…

"market cap is how much shareholders think that profit stream is worth"

=> Wrong, Market Cap has little to do with what you mentioned. It is calculated by determining the total dollar market value of all of a company's outstanding shares.

Ref: http://www.investopedia.com/terms/m/marketcapitalization.asp

Re: Google Passes Exxon to Become Second-Most Valuable U.S. Company

#85

Post by no_gravity »

nostromo wrote: post #62
martythemaniak wrote: post #6

I know it sounds a little ridiculous, but I think Google still has a long way to grow. I can easily see them as the first trillion dollar company and well beyond that. I think they understand the process of re-inventing themselves better than any other tech company. They acquire a lot of companies, some of which continue to grow and change the very nature of Google itself (example Android). They also understand Black…

My gut agrees. But I'm still wondering what their next hit is. Despite a million products, they're still a one-hit-wonder in terms of revenue.

A two-hit-wonder. 50% of their revenue comes from search and 50% from adsense.

Re: Google Passes Exxon to Become Second-Most Valuable U.S. Company

#86

Post by calbear81 »

nostromo wrote: post #62
martythemaniak wrote: post #6

I know it sounds a little ridiculous, but I think Google still has a long way to grow. I can easily see them as the first trillion dollar company and well beyond that. I think they understand the process of re-inventing themselves better than any other tech company. They acquire a lot of companies, some of which continue to grow and change the very nature of Google itself (example Android). They also understand Black…

My gut agrees. But I'm still wondering what their next hit is. Despite a million products, they're still a one-hit-wonder in terms of revenue.

- Self driving cars - Robotics - Connected home electronics (Nest, etc.)

Re: Google Passes Exxon to Become Second-Most Valuable U.S. Company

#87

Post by brudgers »

3pt14159 wrote: post #64
brudgers wrote: post #32

Whoopdee shit. If Exxon and Google were both liquidated today which one would produce more cash? Google share prices reflect a speculator's premium. Exxon's better reflect the value of the underlying assets.

Exxon is sitting on a resource that will soon be replaced with a more efficient one: electricity. It is much, much, much cheaper to produce electricity in coal or nuclear plants and charge cars to run on the road than it is to refine gasoline and pump it into cars. Google is sitting on top of the most amount of information ever collected by any profit-seeking organization ever. Skate where the pucks going man.

25 years ago, you might have said DEC was the puck.

15 years ago, Yahoo.

The ball is round, the game is 90 minutes. Everything else is just theory.

Re: Google Passes Exxon to Become Second-Most Valuable U.S. Company

#88

Post by prayag »

brudgers wrote: post #61
frogpelt wrote: post #33

I have to say I don't understand companies that have very little in the way of tangible assets being valued higher than companies that have mounds of tangible assets. For instance, Exxon-Mobil has $347 billion in tangible assets while most of Google's value comes from its brain trust and the vision of its leadership. The same could be said of Apple though they do have $40 billion in cash. In other words, if both comp…

If Google disappeared this weekend, we'd wake up Monday morning and our Android phones would still work, a few people would miss Play and the worst part would be listening to people complain about Bing search and everyone else's maps. If Exxon disappeared I'd be in line at the pump filling up gas cans in addition to the tank and on my way to stockpile canned goods, potable water. and buckshot.

This is exactly how we should value companies. Depending on the chaos it would cause if they disappeared tomorrow.

Re: Google Passes Exxon to Become Second-Most Valuable U.S. Company

#89

Post by diminish »

milkshakes wrote: post #56
throwaway_yy2Di wrote: post #48

Yet it's so small : XOM ('12) GOOG ('13) Revenue $453 B/a $60 B/a Profit $45 B/a $13 B/a Market cap $393 B $394 B https://en.wikipedia.org/wiki/Google https://en.wikipedia.org/wiki/ExxonMobil (101 for anyone who doesn't know this: revenue is how much you sell, profit is what's left over for shareholders, market cap is how much shareholders think that profit stream is worth). Relevant: check out wikipedia's rankings o…

You're neglecting growth: https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&...

One Question remaining is when Google's market value will surpass Apple's. That'll likely happen before the end of this year, so get ready for the repetition of the same HN discussion, replacing Apple with Exon.

Re: Google Passes Exxon to Become Second-Most Valuable U.S. Company

#90

Post by scoofy »

milkshakes wrote: post #56
throwaway_yy2Di wrote: post #48

Yet it's so small : XOM ('12) GOOG ('13) Revenue $453 B/a $60 B/a Profit $45 B/a $13 B/a Market cap $393 B $394 B https://en.wikipedia.org/wiki/Google https://en.wikipedia.org/wiki/ExxonMobil (101 for anyone who doesn't know this: revenue is how much you sell, profit is what's left over for shareholders, market cap is how much shareholders think that profit stream is worth). Relevant: check out wikipedia's rankings o…

You're neglecting growth: https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&...

This is a reasonable thing to point out. When valuing equities, i tend to use a strategy out of the playbook of a less famous fund manager, John Neff. That is, one that includes total return.

Indicator: Neff Ratio = (EPS growth rate + dividend yield)/PE

This is similar to the inverse of PEG, a much more common indicator, but it includes yield as part of total return. It's one of my primary screens when looking for equities, because both Exxon and Google would have good marks, even though their return would be from different sources.

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