New Trade: Long Alphabet (GOOG) & Short eBay (EBAY)

By: ispeculatornew
Date posted: 08.22.2016 (3:00 am) | Write a Comment  (0 Comments)

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Today I am opening my 17th trade of the year between between 2 names that I have traded quite a bit over the years, which will hopefully help me rebound from a few rocky weeks of long & short trading. As is always the case, you can see past 2016 (and previous years) trades here:

http://www.intelligentspeculator.net/livetrades

Let’s start off by looking at the numbers:

TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthAnalyst ratingBook ValueBetaRevenue/ShareSales 5Y Avg GrowthEPS 5Y Avg Growth
EBAYeBay Inc30.6319.0214.7111.06-2.253.55.70.997.110.03100.44
GOOGAlphabet Inc775.42N/A19.312.4513.624.64N/A1.21N/A19.1913.78

Long Alphabet (GOOG)

Alphabet is a company I’ve traded less than you’d expect, mostly because as much as I love Google as a consumer, it’s not as straight forward in terms of investments. Why? Lack of discipline and transparency, but also the moonshots. While all of those issues still exist to some extent, I’d say they’re all getting better (with the hire of a new CFO, the new Alphabet structure, etc) so I do feel more confident in going long Google in a “short term” trade like this one.

GOOG_chart

 

Next earnings: October 13th 2016

Short eBay (EBAY)

While this could certainly look like I’m taking a negative view on eBay (in a way it is of course), this is more of a play on my strongs doubts about eBay being able to turn things around and/or come up with spectacular numbers. Ebay’s P/E and forward P/E ratio are not way off but do still point to more growth than what I think the company can pull off, especially in the face of Amazon, Walmart and others competing.

EBAY_chart

 

Next earnings: October 12th 2016

Disclaimer: Prior to opening this trade, I do not have a position on GOOG or EBAY
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