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Parsing the Street's Reaction to Google


Bulls and bears weigh in on the search giant.

  • Credit Suisse seems to be firmly in the middle ground. The firm noted concern about Google's possible exit from China, saying that it remains an overhang. Still, the firm reiterated an Outperform rating and a $700 target.

    Some are fully bullish on Google, regardless of the current hiccups it's experiencing.

  • Houston money manager Ryan Krueger, who currently doesn't have a position in Google, likes the stock at current levels:

    "They score very well on our system. I mean, look, my 7-year-old saves her work at public school via Google Docs. If I buy, it's not a technical trade or scalp. I just don't buy them down big, because, as you've seen, declines lead to declines, not bottoms. Bottoms are best bought with a stop above, so I'd rather do that."

    Krueger also believes the just-announced Supreme Court ruling allowing corporations to spend directly on political campaigns will positively affect Google's stock.

    "Increased ad spending will surprise to the upside and bang for your buck will be ever more important," he said.

  • Last week, Minyanville professor Sean Udall added shares of Google back under $595 and said, "I likely won't let this China issue knock me out of them. However, the breach of the 50-day may hold me back from purchasing shares right away, so I can gauge the reaction and see how much cheaper I can acquire shares. Don't get me wrong, I'm an aggressive buyer on weakness but sometimes you have to sit back and see what the market gives you."

    Today on Minyanville's Buzz and Banter he wrote, "I think the lows are in for Google and this selloff will prove an excellent entry as Google will soon be back into $600s in relatively short order. In fact, I'm raising my low- to mid-$700s target to the low $800s as I feel Google may be the cheapest large/mega-cap growth stock on the planet. I covered all my hedges and have no downside protection at this point. Bottom line, I've followed every one of Google's quarters and I've seen quarters this good propel the stock $25 to $40 higher."

  • Stifel Nicolaus analyst George Askew reiterated a Buy rating on Google today, noting that Google's 2009 fourth-quarter results were strong despite "the market's initial knee-jerk reaction"

  • Barclays is maintaining an Overweight rating and a $675 price target.

It should be an interesting 2010 for Google and investors as we watch how the company's foray into hardware pans out, the financial ramifications of Chinese government policy, and the intensifying rivalry with Apple.

What does it all mean? It may simply be one man's opinion, but, to borrow a line from Collins Stewart, Google looks like this year's "show-me story".

No positions in stocks mentioned.
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