Is Alphabet (GOOG) an Attractive Investment?

Wedgewood Partners, an investment management firm, published its second-quarter 2022 investor letter – a copy of which can be downloaded here. For the first half of 2022, a portfolio net return of -17.2% was recorded by the fund, underperforming the S&P 500 Index which delivered a -16.1% return for the same period. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.

In its Q2 2022 investor letter, Wedgewood Partners mentioned Alphabet Inc. (NASDAQ:GOOG) and explained its insights for the company. Founded in 2015, Alphabet Inc. (NASDAQ:GOOG) is a Mountain View, California-based multinational conglomerate company with a $1.3 trillion market capitalization. Alphabet Inc. (NASDAQ:GOOG) delivered a -27.12% return since the beginning of the year, while its 12-month returns are down by -22.92%. The stock closed at $105.44 per share on July 20, 2022.

Here is what Wedgewood Partners has to say about Alphabet Inc. (NASDAQ:GOOG) in its Q2 2022 investor letter:

“Alphabet grew its core search revenues +24% on a +30% year-ago comparison. Despite this stellar top-line performance, shares sold off as the market began to discount fears of a recession. However, the stock has outperformed relative to other holdings as core Google Search has been less affected by disruptions related to Apple’s privacy initiatives. Alphabet’s Cloud segment is generating revenue at a $24 billion run rate but is still running at a loss. We think this business can generate much better margins at some point. In the meantime, the Company has 4% to 5% of shares authorized for repurchase which is an attractive use of capital as the stock trades for about just 18X 2023 consensus estimates.”

Photo by Kai Wenzel on Unsplash

Our calculations show that Alphabet Inc. (NASDAQ:GOOG) ranks 5th on our list of the 30 Most Popular Stocks Among Hedge Funds. Alphabet Inc. (NASDAQ:GOOG) was in 160 hedge fund portfolios at the end of the second quarter of 2022, compared to 158 funds in the previous quarter. Alphabet Inc. (NASDAQ:GOOG) delivered a -11.77% return in the past 3 months.

In July 2022, we also shared another hedge fund’s views on Alphabet Inc. (NASDAQ:GOOG) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.

Disclosure: None. This article is originally published at Insider Monkey.