5 Best Diversified Stocks to Buy Now

2. Alphabet Inc. (NASDAQ:GOOG)

Number of Sectors: 4

Number of Hedge Fund Holders: 158

Alphabet Inc. (NASDAQ:GOOG), the parent company of Google, is mainly an information technology company but represents three other sectors other than information technology, namely, consumer discretionary, consumer staples and healthcare. 

Alphabet Inc. (NASDAQ:GOOG) owns several assets in the information technology sector. The prominent ones include Google search engine, Google Ads, Google Cloud, YouTube and DeepMind AI lab. Its consumer segments include Google Nest and Google Fiber, with the former providing smart thermostat and smoke detector solutions and the latter providing broadband services currently in 19 cities. 

On the healthcare front, Alphabet Inc. (NASDAQ:GOOG) operates Verily, a subsidiary researching and developing healthcare solutions like baseline monitors, bioelectronic medicines, immune profilers etc. It is also one of the most profitable subsidiaries of Alphabet Inc. (NASDAQ:GOOG) apart from Google search engine. 

When it comes to company fundamentals, Alphabet is in a relatively safe spot. Its current ratio is 2.87 with an impressive debt to equity ratio of 0.06 and a return on equity of 30% in the first quarter of 2022. On April 27, Wells Fargo analyst Brian Fitzgerald lowered the price target on Alphabet Inc. (NASDAQ:GOOG) to $3,400 from $3,600 to reflect declining sector valuations, but kept an ‘Overweight’ rating on the stock after the company’s Q1, 2022 SEC filings. 

A segment of Farrer Wealth Advisors’ investor letter of Q1 in 2022 was devoted to Alphabet Inc. (NASDAQ:GOOG). The Following is what it had to say: 

“Alphabet: We won’t waste much time trying to explain to our clients why Alphabet is such a phenomenal business, we believe that is quite self-evident. The better explanation is why we never bought Alphabet before. The reason was a personal bias we held based on three beliefs (which we now believe to be incorrect)

Growth in YouTube would stall as the increased ad-load would turn-off viewers (the double ad-load at the beginning of videos for example). Consumers will focus on discovery rather than search to purchase new items. For example – using Instagram/TikTok to decide what new clothes to buy instead of ‘googling’ for clothes. Other Bets: In general, we felt that capital spent on “Other Bets” has been a bit wasteful with the segment earning just around $3.1bn in revenue versus nearly $21bn in operating losses over the last five years…” (Click here to see the full text)