Thirteen investors GuruFocus follows either bought the stock for the first time or added more shares to their existing holdings, including George Soros, Julian Robertson and John Burbank.
Sixteen also either decreased or eliminated their positions in Google.
Google’s stock gained 12.5% in the first nine months of the year, but after a pullback is up only about 4% year to date.
In the past five years, it has grown its revenue per share at a rate of 25.1%, EBITDA at 25.1%, free cash flow at 41.4% and book value for 26.4%. Last year it made $37.9 billion in revenue and $9.7 billion in net income, and it has $45.7 billion in cash on its balance sheet and $7.2 billion in long-term liabilities and debt.
Google, a web search and advertising company , in the third quarter and first nine months of 2011 derived 96% of its revenue from advertising, compared to 94% and 95% for the third quarter and first nine months of 2012, respectively. Google’s dramatic growth has benefited from the wave of advertising moving online from offline. Currently the company’s business is changing as mobile search queries increase and desktop query growth decreases.
Google expects the cost of revenues will increase in the future as traffic acquisition, data center, content and acquisition costs, and credit card and other transaction fees, manufacturing and inventory-related costs increase.
As an additional source of growth will be acquisitions. Its most recent purchase was Motorola, which it acquired on May 22, 2012, and whose operating results boosted Google’s third quarter income.
Eleven Gurus either introduced Intel to their portfolios or increased their existing stakes in the company in the third quarter. Twelve also decreased their or eliminated their Intel stakes.
Intel’s stock has declined almost 20% year to date.
Intel has grown its revenue per share at a rate of 9.6%, EBITDA at 21.7%, free cash flow at 15.7 and book value at 7.1% annually over the last five years. Revenue last year came in at $54 billion, an increase from $43.6 billion the previous year, and net income was $12.9 billion, up from $11.7 billion.
The company has $14.4 billion in cash and $13.2 billion in long-term liabilities and debt on its balance sheet.
Intel’s CFO commented on its third quarter 2012 results: “Third quarter revenue came in at $13.5B, flat from the second quarter and slightly better than our revised expectations. Relative to the normal seasonal growth we see in the third quarter our business was negatively impacted by macroeconomic weakness leading to softness in both the consumer and enterprise market segments. In addition, we saw a reduction in inventories in the PC supply chain versus the normal increase in the third quarter. Gross margin of 63.3% was flat from the second quarter with lower unit costs being offset by factory EOL charges and slightly lower average selling prices. Operating income of $3.8B was 29% of revenue and flat sequentially. Net Income of $3.0B and earnings per share of $0.58 were up 5% and 7% respectively from the second quarter.”
In the third quarter, no new Gurus bought Apple stock, 7 added to their holding, and 10 reduced or sold out completely.
Apple’s stock increased 39% year to date.
In the last five years, the company increased its revenue per share at a rate of 44.5%, EBITDA at 64.7%, free cash flow at 56.5% and book value at 50.2%. In fiscal year 2012, it pulled in $156.5 billion of revenue, an increase from $108.3 billion the previous year, and net income of $41.7 billion, an increase from $25.9 billion the previous year.
Apple’s balance sheet shows $48.7 billion in cash and $19.3 billion in long-term liabilities and debt.
The company which makes innovative products such as the iPod and iPhone, operates in a highly competitive market. As it continues to expand its personal computer, mobile communication and media devices market opportunities, it expects competition to intensify as competitors imitate aspects of its products or collaborate to produce better products, it said in its 2012 annual report.
“The company’s future financial condition and operating results depend on the company’s ability to continue to develop and offer new innovative products and services in each of the markets in which it competes,” it said.
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