4 Stocks That May Hit $1,000 Before Google
Feb 21st 2013 2:31PM
Updated Feb 21st 2013 3:20PM
Google shares hit fresh all-time highs this week, busting through the $800 barrier along the way.
Some analysts thinks that things will get even better for the dot-com bellwether. Bernstein Research analyst Carlos Kirjner and CLSA Asia-Pacific Markets analyst James Lee are raising their price targets on Google shares to $1,000.
It's a big number, even if only represents a 25% pop from here to get there.
There are just two stateside companies that currently trade for more than $1,000. Will Google make three?
Well, what if Big G isn't the next company to break into four digits? Don't get me wrong. I'm a big fan of Google. It's the undisputed global champ when it comes to online advertising. As big as Google may be, it's still growing at an astounding clip. Revenue soared 36% in its latest quarter!
Sure, a good chunk of that came from the Motorola Mobility acquisition, but even if you back that out, the online titan still grew its revenue 22% during the holiday quarter.
However, there are also plenty of other companies trading in the triple digits that may have their eyes set on the $1,000 finish line. Let's look at a few that may -- if things go right -- beat Google to 1k.
Apple -- $448.85
If analysts scrambling to slap four-figure price targets on Google sounds familiar, it's because a couple of Wall Street pros were doing the same thing to Apple when it was topping $700 late last year.
The good times didn't last. Apple has come through with a few disappointing quarters, and the fear these days is that Google's Android is eating Apple's lunch.
Apple's future will be challenging, especially as it tries to make its high-priced products more accessible to mainstream audiences worldwide. The market has marked down the shares as a result of declining margins and slowing growth, but the market can't forget that Apple is an innovator. The iPad and iPhone -- two product lines that account for the lion's share of Apple's revenue and profitability these days -- didn't even exist six years ago. When Apple disrupts again, and it will, the market will reward the stakeholders.
NVR -- $980
Okay, I'm cheating on this one. The homebuilder actually broke through $1,000 last month, staying there until it closed below that mark yesterday.
NVR has never traded this high, even during the sudsy real estate bubble days several years ago. The new highs are well earned. Unlike most of its lesser peers, NVR has been able to remain profitable during the downturn. It only posted a single deficit -- during the fourth quarter of 2008 -- as it rolled through the darkest days of residential real estate.
NVR's conservative approach has paid off. Revenue and earnings bounced back last year, and the good times should continue. Analysts see revenue climbing 34% this year and another 18% come 2014. At $1,000, NVR would only be fetching 13 times next year's projected profitability, and that's a solid foundation to build on.
priceline.com -- $688.20
The "name your own price" online travel portal has been a big winner over the years. Priceline also owns other travel websites, making it a global force.
Europe is a big market for Priceline, and the sovereign debt crisis there has weighed on Priceline's potential. As the global economy improves and the world begins to embrace leisure and corporate travel again with aplomb, Priceline will be there to lead the way.
Priceline reports next week. You have to go all the way back to the first quarter of 2006 to find the last time that the e-travel leader didn't beat analyst profit forecasts.
Do the math. Take the flight.
Baidu -- $88.45
There are 180 stocks trading above $100. Did I really have to dig into the double digits for a fourth challenger to the $1,000 finish line? Yes.
Baidu is volatile. China's leading search engine has been known to go on tears. In fact, it would've beaten all four of the companies mentioned earlier to $1,000 three years ago if it hadn't executed a 10-for-1 stock split.
Yes, Baidu at $1,000 would push its earnings multiple past 100, but it will be an easier feat to manage if China's online economy improves at a heartier pace than the market is expecting.
There's an argument to be made that Baidu is wasted here. If things are going that well for Baidu, then surely Google will also be doing well. However, Baidu is a concentrated bet on the world's most populous nation. China is still early in its online migration, and its economy is growing at a much faster clip than that of the balance of the planet.
Either way, no matter which company hits $1,000 first, it probably bears pointing out that four figures isn't a finish line. It's really just a new starting line.
Curious investors, start here
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The article 4 Stocks That May Hit $1,000 Before Google originally appeared on Fool.com.Longtime Fool contributor Rick Aristotle Munarriz has no position in any stocks mentioned. The Motley Fool recommends Apple, Baidu, Google, and Priceline.com. The Motley Fool owns shares of Apple, Baidu, Google, and Priceline.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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