Super Bowl 'Smash-It-Up' Trades

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Super Bowl Trade V: Buy Google (GOOG)

Missed the highlights? Google, then catch 'em on YouTube

By Nick Atkeson and Andrew Houghton

It is no surprise that we will see beer and car ads dominate commercial time during the Super Bowl.  What may be of more interest is that of the list of total Super Bowl advertisers, about 30% of them are dot-com type companies.  Maybe even more interesting, those dot-com advertisers do not include Yahoo, Google, Microsoft, or any of the other really dominant dot-com players.  The list is made up of companies like E*Trade Financial and GoDaddy.com

The point is this: A decade after the dot-com boom, the Internet keeps growing up. The best-positioned and most-exposed company to current and future Internet activity is Google.  Google just reported a better-than-expected quarter and continues to grow at a crazy pace. 

During the past year, the company's revenues grew more than 30%, and by the end of 2010, their revenues are expected to be another 30% higher.  In this down market, you have an opportunity to buy this earnings-beating company for a 16 P/E. (If you pull the cash out, the P/E drops to about 14.) The stock is down more than 50% from the highs. 

The final point to make on Google and the Super Bowl is that many viewers, like us, will miss many of the commercials.  Bathroom breaks, sloppy friends, loud children are among a few of the distractions.  On Monday, when we go to work, we will be Googling all those crazy ads we just missed and watching them on YouTube -- which is owned by Google.

Buy Google. (GOOG)

Read Nine Winning Trades for 2009 by Nick Atkeson and Andrew Houghton

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