Investors waiting for Internet superstar Google (GOOG:Nasdaq - commentary - research) to fall off a cliff are going to be waiting a long time, Jim Cramer said in his "Real Money" radio show Tuesday.
The Google story, which added a chapter Monday when the shares jumped over $300 for the first time, is altogether different than the high flyers that crashed in the last 1990s, because it's about "earnings not eyeballs," Cramer says. As a result, both retail and institutional investors are lapping it up, fearful they will miss the one true tech grower. Furthermore, mutual fund managers want to make sure they have it listed in their holdings with the end of the quarter in just a few days.
Cramer argued that Google is not just a momentum story, either; it holds up on relative valuation. By using fellow Internet star Yahoo!'s (YHOO:Nasdaq - commentary - research) forward price earnings multiple of 50 as a comp, he came up with a Google price target of $350 based on the company earning $7 a share next year.
Nevertheless, don't jump in with both feet just yet, as Google shares could weaken next week once end-of-quarter window dressing comes to an end. Once that's done, however, the stock is probably headed upward for the rest of the year, Cramer said.
**Recap, Cramer likes Goog, Cramer sees higher in 2005 to $350, a "FAIR" and just valuation.
FORGET it is near 25X sales and book value. After all Cramer SAYS it's a value play! LOL
Take note: GOOG has 100 M shares NOT in float yet. OH, GOOG is 50% ABOVE it's 200 day moving average!
WHEN IT FALLS, and it will, as FAST as it rose! IMHO
Duratek
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