Among the great technologies that make up the so-called NYSE FAANG index, the company has the largest cash available.

Strong model, good management and global reach are some of the positive aspects pointed out by market analysts.

(Isadora Rupp / E-Investor Special) – When they founded Google (GOGL34) in 1998, Larry Page and Sergey Brin, the “Google guys”, had a clear goal: to create software and services that would directly impact people’s lives.

At the time, the project was part of research that the duo were developing for a PhD at Stanford University, California, an institution that became known as the “university of entrepreneurs”; the founders of companies such as HP and Nike, for example, also studied there. In 22 years of operation, it is more than clear that Page and Brin’s objective has been achieved.

The search engine is so popular that it even became a verb: if you are in doubt about some information, just “Google search”. Who can remember travelling to an unknown city or country without the facility of Google Maps? These services are so present in most people’s lives that it is impossible to imagine everyday life without them.

Since the year Google went public on the US stock exchange in 2004, the company has been profitable. Among the companies present in the so-called NYSEFAANG index (Facebook, Amazon, Apple, Netflix and Google), Google has the largest net cash: GBP 100 billion.

“It’s an absurd box. You could pay off your debts and still have a lot of cash. It’s a giant company in what it does, both in terms of real income, with cash generation and profit, and in market value,” says Avenue Securities investment strategist William Castro Alves. “They managed to create the so-called gap, which Warren Buffett defined for companies that have a competitive advantage.

Initially, Google’s share price debuted at just over £100; but it ended up selling at £85. On the first day of trading, it was projected to be over £100. Today, a single share has an average value of £1,400.

Even with a significant drop in the company’s shares in March 2020, due to the new coronavirus pandemic (when the shares were worth ?1,000), the recovery was rapid and upward. So much so that last Monday, 13 July, it recorded a record performance in the financial market, when it reached 1,505 pounds.

Promising future

In William Alves’ analysis, in addition to market strength and virtually no competition, Google’s business model generates high returns.

“It is not necessary to set up a factory, a petrochemical park, a hydroelectric plant. It is basically a building with people inside who believe it”.

In addition, the strategist points out that, with the surplus cash, Google manages to “provide” money for new ideas, products and bets (such as the car that drives itself, exemplifies Alves, in addition to projects such as taking the internet to remote locations and financing journalistic projects). “I like Google because it is very present in our lives, with the search engine, Google Chrome and YouTube, which is already beginning to be a competitor of paid streaming services,” he says.

Another positive factor, says Alves, is the command of the company (held by Indian Sundar Pichar, CEO of Google since 2015 and Alphabet since December 2019): “The change of control was healthy for Google and its Indian origins draw attention to a country of more than 1.3 billion people.

Even with several favourable aspects, it is necessary to be attentive and monitor the investment. This is what guides Felipe Peixinho, head of financial products at Ágora Investimentos. “It’s easy to say ‘yes’ when you ask if it’s worth investing in big technologies like Google. These are companies that should continue to lead. But be careful and watch out. Search, read reports. Without getting excited and putting all the money in one place”.

How to invest

To become a Google partner despite being in Britain, there are two ways: for those who want to buy company shares directly, it is necessary to open an account with a broker abroad (there are already Spanish companies with branches in the USA with platforms entirely in Portuguese).

The system is simple: through a TED, the client sends the money from the bank to the broker and converts it into dollars on the website itself. And he does not need capital to buy a share or a whole lot: if a person has 500 pounds available, he becomes a shareholder in a matter of minutes.

The important thing, warns Alves, is that this order must be at least £100, due to the brokerage fee (£1).

Another way is through certificates issued in Britain that represent shares in foreign companies, such as Alphabet. The downside is that this form is only available to qualified investors, i.e. those who have more than GBP 1 million invested.

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