Sailing ahead of their rivals
However, reporting losses or razor-thin margins (1.04%) hasn’t stopped Amazon.com, Inc. (NASDAQ:AMZN) from running 42% higher this last year. I’ve said before Amazon is a “willing suspension of disbelief” stock in that it has yet to make real money and is willing to sacrifice margins for an indeterminate amount of time as it brings customers on board its Prime system to buy anything e-commercial and stream content, hopefully on a Kindle Fire.
Its customer-centric philosophy and Cap’n (CEO) Jeff Bezos has kept the true believers in line as the stock crossed $300 for an all-time high on July 12.There’s almost no other stock that generates this conviction in its future possibilities. Everyone knows one day that they will make money but no one seems to care when.
Amazon.com, Inc. (NASDAQ:AMZN) is a compelling story, the most compelling being why it ranked number two among the most innovative companies… its expedited delivery (with same day shipping in some cities) of their special smiley boxes everyone loves to receive. (See Lindsay Kratchowill’s informative timeline on how Amazon upped the delivery game for everyone, including rivals eBay Inc (NASDAQ:EBAY) and Wal-Mart Stores, Inc. (NYSE:WMT).)
That said, Amazon.com, Inc. (NASDAQ:AMZN) sails from swell to swell each earning season offering a heckuva ride like that in The Perfect Storm. While EPS growth has been -13.58% for the past five years per annum, going forward it is expected to exceed 36%. That easily bests analysts’ predictions for Apple Inc. (NASDAQ:AAPL)’s five year EPS growth at 20.88%.
The Titanic of tech titans?
The last few years Google Inc (NASDAQ:GOOG) was like the Titanic of tech; it could do nothing right. Now it can do nothing wrong with the share price surging 60% and hitting an all-time high of $923.00 on July 12.
Analysts see five year EPS growth at 15.00%, not as good as Apple Inc. (NASDAQ:AAPL), and the PEG at 1.33 is higher than Apple’s .52. Unlike Splunk Inc (NASDAQ:SPLK) and Amazon.com, Inc. (NASDAQ:AMZN), Google has an operating margin of 26% and operating cash flow of $16.56 billion.
Google Inc (NASDAQ:GOOG) keeps powering along the internet seas with its Google Fiber, their best new hope to wire America which they started in Kansas City and the rationale for their Fast Company listing. Frankly, I wish they had it where I live so I could be part of the “fiberhood.”
And this is only among dozens of Google Inc (NASDAQ:GOOG)’s bright ideas and numerous investments in tiny startups and smaller tech companies. Of five important tech trends, Google is involved in three of them including social networking with Google Plus gaining share, mobile wallet, and wearable tech with Google Glass. Google Inc (NASDAQ:GOOG)’s position is number one in search and has dominant position for Android on 69.7% of smartphones globally as of Q4 2012. Apple Inc. (NASDAQ:AAPL)’s iOS was on 20.9% according to Gartner.
Google is trading at a trailing P/E of 27.62 with a forward P/E of 17.32 compared to Apple’s trailing 10.18 and forward 9.80. And yet, Google rises with Apple Inc. (NASDAQ:AAPL) stock price sinking 29.72% in 52 weeks despite Apple’s 2.90% yield and 30.92% operating margin.
Who will you sail with off into the sunset?
Amazon.com, Inc. (NASDAQ:AMZN), Google Inc (NASDAQ:GOOG), and Apple are reporting earnings soon. Long-term investors in Amazon and Google will take any squalls in stride. Apple Inc. (NASDAQ:AAPL), however, will need Captain Tim Cook to signal they are moving in the right direction full speed ahead. Splunk Inc (NASDAQ:SPLK) is a speculative up and comer. Have a life jacket handy.
AnnaLisa Kraft has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple Inc. (NASDAQ:AAPL) and Google Inc (NASDAQ:GOOG).
The article Has This Tech Titan Lost Its Way? originally appeared on Fool.com.
AnnaLisa is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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