Summary Alphabet shares have declined in recent market turbulence. Discussion of the difference between the two share classes. Which is a better buy, and is it worth switching between them? Looking for more investing ideas like this one? Get them exclusively at Microcap Review. Learn More ยป

Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL), owner of Google, needs no introduction. The firm has one of the few brand names that have become a verb and owns YouTube and Android besides that, along with a variety of moon shot type projects (self-driving cars, etc.). In my opinion, it isn't knowable whether the moon shots will work out, but their core business has become part of the electronic plumbing of modern day life and is one of the truly excellent businesses in the world.

Google Business Quality

The firm has an A+ profitability grade from Seeking Alpha, which should come as no surprise. The moat here is obvious - everyone uses Google to search, and the ads get more relevant (and thus more valuable) the more you use it. That creates a flywheel of increasing profitability. It is also a beneficiary of more and more economic activity going online, as the first way people look for a new service provider is very often a Google search. Their financial metrics bear out this moat, with a recent return on equity of 30%, which would be higher if they didn't have excess cash on their balance sheet. Their margins at all levels are also excellent, and they are investing through the income statement in the operating losses of their various moonshot projects, which obscures the unbelievable quality of their core business. After the recent market turbulence, the price of this business is not especially onerous, with Seeking Alpha having the forward P/E at 20X. All of this is well known, and so for this piece, I'm primarily focusing on the history and differences between their various share classes from the perspective of both a new...

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