Alphabet, Inc. (GOOGL, Financial)
The online advertisement business has seen impressive growth over the last few years due to digitization and that trend is expected to continue as more businesses move online and more connected devices are released. Morningstar analysts estimate that digital advertising will increase by 22.5% in 2021 and 17.5% in 2022. Alphabet remains the leader in search, with Google controlling over 90% of the market, and this consistent leadership has created a network effect for the company. Alphabet has over $136 billion in cash on their balance sheet and debt levels are at $14.3 billion, providing flexibility to continued investment in areas such as cloud and artificial intelligence. Cash on the balance sheet should also help maintain consistent shareholder returns with the company still approved to repurchase up to $50 billion of shares under its current program.
From Jeff Auxier (Trades, Portfolio)'s Auxier Asset Management fall 2021 market commentary.
