Hedge fund manager Bill Ackman is a strong advocate for owning a small group of stocks and holding onto them for years. One of his top picks is Alphabet (GOOG), the parent company of Google. Ackman’s firm, Pershing Square Capital Management, holds a significant stake in Alphabet, with 9.38 million Class C and 4.35 million Class A shares, totaling nearly $2 billion.
Alphabet accounts for over 18.5% of Pershing’s $10.4 billion in assets, making it the second-largest holding in the firm’s portfolio after Restaurant Brands International (QSR). Except for Lowe’s Companies (LOW), each of Pershing’s seven holdings has a weighting of at least 11%.
Alphabet stands out for its strong free cash flow generation. As of Q1 2024, the company’s trailing 12-month free cash flow was $69.11 billion, representing 21.7% of its $318.15 billion in revenue. When compared to the free cash flow of Pershing’s other holdings, Alphabet’s margin is significantly higher.
Analysts are bullish on Alphabet, with 78% rating it a Buy and setting a target price 14% higher than its current trading value. While Alphabet may not be the favorite among analysts, its strong free cash flow generation sets it apart.
Compared to other top stocks like Amazon and Microsoft, Alphabet holds its own in terms of free cash flow margins. Microsoft, in particular, has a higher free cash flow margin but has seen slightly lower stock performance compared to Alphabet.
In conclusion, while Microsoft may be the top pick among the “Magnificent 7” stocks, Alphabet’s solid free cash flow generation keeps it in the conversation. Overall, Alphabet is rated as a Moderate Buy. Welcome to DailyBubble, your go-to source for all things entertainment news! Whether you’re a pop culture junkie or just looking for the latest updates on your favorite celebrities, we’ve got you covered. From breaking news to exclusive interviews, we bring you the latest and greatest in the world of entertainment.
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