Is it Still Wise to Consider Buying Alphabet (GOOG) Shares?

Davis Funds, an investment management firm, published its “Davis New York Venture Fund” fourth quarter 2021 investor letter – a copy of which can be downloaded here. For the full year of 2021, Davis New York Venture Fund returned 12.5%.  Although the earnings of the fund’s portfolio companies have grown 1% per year faster than the benchmark S&P 500 Index, they can currently be purchased at a 52% discount to the index. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Davis New York Venture Fund, in its Q4 2021 investor letter, mentioned Alphabet Inc. (NASDAQ:GOOG) and discussed its stance on the firm. Founded in 2015, Alphabet Inc. (NASDAQ:GOOG) is a Mountain View, California-based multinational technology conglomerate holding company with a $1.7 trillion market capitalization, and is currently spearheaded by its CEO, Sundar Pichai. Alphabet Inc. (NASDAQ:GOOG) delivered a -6.97% return since the beginning of the year, while its 12-month returns are up by 32.21%. The stock closed at $2,692.01 per share on March 17, 2022.

Here is what Davis New York Venture Fund has to say about Alphabet Inc. (NASDAQ:GOOG) in its Q4 2021 investor letter:

“Within the traditional growth category, growing euphoria has led to bubble prices for many companies, most especially those with new and unproven business models such as those discussed above. In contrast, our research focuses on a select handful of proven growth stalwarts whose shares still trade at reasonable valuations. For example, because of concerns about future litigation and regulation, several dominant internet businesses, including Alphabet, trade at steep discounts to many unproven and unprofitable growth darlings that, in our view, trade at euphoric prices. While we expect a continued barrage of negative headlines around the company, as well as increased regulation in the years ahead, we do not expect a significant decline in its long-term profitability.”

Photo by Firmbee.com 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 158 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 156 funds in the previous quarter. Alphabet Inc. (NASDAQ:GOOG) delivered a -7.07% return in the past 3 months.

In March 2022, we also shared another hedge fund’s views on Alphabet Inc. (NASDAQ:GOOG) in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

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