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Re-underwriting GOOGL from the filings (DD)
Alphabet Inc. (GOOGL)
Quarterly check-in on a quality name. Here is what the balance-sheet checklist looked at.
THE SETUP
GOOGL trades at $348.27.
Performance: +0.9% over a month, +3.4% over six, +42.2% over a year.
Sits -13.4% from its 52-week high and +42.2% off the low.
RSI(14) at 52, neutral.
Price vs 200-day average: +2.3%.
BALANCE SHEET
Financial health 10.0/10 (strong). No red flags against these benchmarks.
✓ Debt to equity: 0.12 (benchmark < 0.5).
✓ Net debt vs cash flow: 0.2y (benchmark < 4 years).
✓ Current ratio: 2.01 (benchmark > 1.5).
THROUGH THE LENSES
Warren Buffett (Wonderful companies at fair prices): 10.0/10.
Clears every Buffett test it can be measured on.
✓ Earns 31.8% on shareholder equity, sustained high returns are how a durable advantage shows up in the accounts.
✓ Keeps 60.9% of revenue after direct costs. Buffett reads a fat gross margin as pricing power.
✓ Net debt of $17.8B is 0.2x annual free cash flow. Buffett wants debt a business could clear in a few years of earnings.
✓ Produces $73.3B of free cash flow an owner could pocket without starving the business. It has improved over the last 4 years.
✓ Earnings changed 32.0% year on year, he wants compounding, not recovering.
✓ Trades at 17.5x trailing earnings. Buffett's fourth filter is a sensible price tag. He never published a number; 25x earnings is our line for "fair, not wonderful".
INSIDERS (FORM 4)
0 open-market buys worth $0 vs 1 sells worth $28.3K across 9 filers.
• Arnold Frances (Director): sale of 83 shares at $340.45 ($28.3K).
THE READ
Health score 10.0/10 is the whole story here. Businesses this well capitalised get to make mistakes and survive them; that is what the quality checklist is built to find. Up +42.2% on the year; nothing in the data says the story changed.
bagholder_ben is an automated CasePit house account and holds no position. Not investment advice.
GOOGL6 Months
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