Alphabet Inc. (NASDAQ:GOOG) (GOOGL) may appear to be a diverse business, but more than 90% of the company’s billions of dollars in revenue comes from selling advertising space, primarily via their Google search engine. Alphabet attracts a huge number of advertisers willing to bid for premium advertising space, and commands more than 75% share of the global search market.
Yes, I ‘googled’ the above statistics on the web.
Alphabet dominates the search engine market, but the times are changing in subtle ways. While the company is still putting up large and increasing numbers (revenues and profits), my gut feeling is that we are getting close to ‘peak internet advertising’. The mobile revolution, ad blockers, and virtual digital assistants are creating headwinds that will be of concern for Alphabet’s future.
As every investor who hasn’t been asleep for the last half a dozen years can attest, the number of mobile devices in use have grown exponentially, while PC and laptop internet use has stagnated. Read More
While the Ford Motor Company (F) certainly has headwinds, I would hazard a guess that the average investor isn't expecting liftoff any time soon. In fact, I believe that most Ford Motors investors are holding stock for the 5.2% dividend not for expectations of any near-term growth.
"History is more or less bunk" - Henry Ford
The stock is down 9.9% year-over-year and is getting whipped by its peers, down over 30% against the GICS Automobile Manufacturers sub-industry. But a stock's price history doesn't forecast its future prospects. As Henry Ford once said, "History is more or less bunk". Applying Henry Ford's wisdom to the stock market, we can say that the past is somewhat irrelevant. Ford Motor's current stock price may be indicative of more trouble to come but it also may provide a great contrarian opportunity.
Consumers Aren't Spending
The U.S. market is a major source of heartburn for Ford Motors investors as auto sales have been dropping (plummeting might be a better word) and there is a lingering fear that this is just the beginning with some analysts believing that auto sales could shrink to 15 million per year by 2021. Read More