The traits these updates have in common is a fluent and pleasant writing style, combined with a simple investment thesis.
Today I'll report the Google (GOOG) thesis from IT Asset Management, a very small and experienced French "boutique" that specializes in information technology investments: Their first mutual funds was born in 1993!
I like their focus in IT and their experience, but what I like more is their writing. You have to know that, contrary to my perception for the U.S. space, here in Europe I'd say that it is rare to find an original thesis about a portfolio manager's holdings.
The link is [url=www.itasset.com/uk/03_fonds/pdf/reporting/644.pdf]here[/url].
In short, this is the perception:
Google is a mature company: Revenue and EPS have increased tremendously, but its stock's price, particularly in the last four years, has been flat due to the perception of lower growth ahead that has compressed multiples. But Google continues to be a very profitable company, so why is it priced less than the U.S. equity market (Google's P/E ex cash is 14 at the end of April '11)?
Why does Amazon (AMZN) for example have a completely different valuation (so, perception)?
Amazon has no credible competitor; Google has Facebook which is eroding its "moat."
Furthermore, Google is one product (Internet search), has a management transition, has privacy issues, has left China, doesn't earn any money from Android (contrary to Apple) ...
Asset Management's view about Google is positive in spite of all these issues, and they think it continues to have very bright prospects ahead.
Facebook is probably building a moat but "... we disagree that Facebook will take over the Internet. This belief surfaces again and again each time a new powerful Internet player emerges. It was raised with Google, as recently as 2007-2008. We think that the Internet should rather be compared to a galaxy composed of several large planets, each dominating its space: search with Google, online encyclopedia with non-profit Wikepedia, consumer social networking with Facebook, business social networking with LinkedIn, instant communication with Skype, video with Youtube (Google), music with Apple (AAPL), ecommerce with Amazon.com, consumer-to-consumer with eBay (EBAY), Internet digital payment with Paypal (group eBay)… As powerful as they are, each major vendor never manages to really encroach into others’ territories".
In addition, Google is investing in new spaces: see Android. Until October '08 there was no product available, but now it has 50% market share in a space where they are building new sources of revenue from mobile advertising and services. Then there is the display advertising business where they are competing well. There is also Google Docs that is gaining traction (3 million corporations are using it)
Good reading and let me know ... your perception!