Analysis of Westchester Capital Management Inc.'s Investment in Alphabet Inc. (NASDAQ:GOOGL)

Key Facts and Data Points

• Westchester Capital Management Inc.:

  • Increased holdings in Alphabet by 0.2% in the 4th quarter.
  • Total shares held: 110,184.
  • Value of holdings: $20,858,000.
  • Alphabet represents 5.2% of its portfolio and is its 6th largest position.

• Other Institutional Investors:

  • Schear Investment Advisers LLC increased holdings by 17.0%, now owning 33,751 shares valued at $5,598,000.
  • Permanent Capital Management LP bought a new position worth $273,000.
  • Landscape Capital Management L.L.C. increased holdings by 27.9%, now owning 25,275 shares valued at $4,192,000.
  • Glass Wealth Management Co LLC raised its position by 4.5%, now owning 37,054 shares worth $7,014,000.
  • Olistico Wealth LLC increased holdings by 9.1%, now owning 8,981 shares worth $1,700,000.

• Institutional Ownership:

  • Total institutional ownership: 40.03%.

Alphabet Stock Performance

• Current Share Price: $167.68 (as of Tuesday).
• 52-week range: $147.22 (low) to $207.05 (high).
• Market Capitalization: $2.04 trillion.
• Key Metrics:
  • Debt-to-equity ratio: 0.03.
  • Quick ratio: 1.84.
  • Current ratio: 1.84.
  • Price-to-earnings (P/E) ratio: 20.83.
  • Price-to-earnings-growth (PEG) ratio: 1.34.
  • Beta: 1.02.
  • 50-day simple moving average: $182.10.
  • 200-day simple moving average: $176.73.

Earnings and Dividends

• Earnings Performance:

  • Alphabet reported $2.15 EPS for the latest quarter, beating estimates of $2.12.
  • Return on equity: 32.49%.
  • Net margin: 28.60%.

• Dividend Announcement:

  • Quarterly dividend: $0.20, paid on March 17, 2025.
  • Annualized dividend: $0.80.
  • Dividend yield: 0.48%.
  • Dividend payout ratio: 9.94%.

Analyst Sentiment

• Analyst Ratings:
  • Average rating: "Moderate Buy" (based on data from MarketBeat.com).
  • Consensus target price: $210.59.
• Recent Upgrades/Downgrades:
  • Goldman Sachs reiterated a "buy" rating with a $210.00 target.
  • Cantor Fitzgerald reaffirmed a "neutral" rating with a $200.00 target.
  • Piper Sandler lowered their target from $210.00 to $208.00 and maintained an "overweight" rating.
  • Roth Mkm reissued a "buy" rating with a $220.00 target.
  • JMP Securities reissued a "market perform" rating.

Insider Activity

• Insider Transactions:
  • Total shares sold by insiders in the last three months: 93,048.
  • Total value of insider transactions: $17,374,274.
  • Percentage owned by insiders: 11.55%.

Business Operations and Market Implications

• Alphabet's Business Segments:

  • Google Services (ads, Android, Chrome, Gmail, Google Maps, Google Photos, Google Play, Search, YouTube).
  • Google Cloud.
  • Other Bets (e.g., Verily, Waymo).

• Market Trends and Competitive Dynamics:

  • Alphabet remains a dominant player in the information services sector, with strong earnings and consistent dividend payments.
  • The company's stock performance reflects investor confidence, despite insider sales and mixed analyst upgrades/downgrades.
  • Increased institutional holdings suggest long-term optimism about Alphabet's growth potential.

• Strategic Considerations:

  • Alphabet's focus on innovation (e.g., AI, cloud computing, autonomous vehicles) positions it for sustained growth in competitive markets.
  • Regulatory scrutiny of tech giants like Alphabet could impact future profitability and market share.

• Long-Term Effects and Regulatory Impacts:

  • Alphabet's ability to maintain its leadership in key markets will be critical for long-term success.
  • Potential regulatory changes, particularly in areas like antitrust and data privacy, could influence the company's strategic direction and financial performance.