Not only has the price of Google been falling over the past 3 months but so has the volume of shares traded.
Although the search giant has battled negatives such as the economic downturn they might also be struggling with dollar’s turnaround. What many investors don’t realize is that Internet companies generate a significant portion of their revenues overseas.
In a research note Sanford C. Bernstein analyst Jeff Lindsay writes,. "Currency rates have had a significant positive impact on reported revenues for U.S. Internet companies over the last few quarters," he wrote. But this month the dollar started to gain ground against most other major foreign currencies.”
(scroll down to find out how the Fast Money traders are playing Google)
How are you trading?
When the stock was at $700 back in January it had an average daily volume of 8.5 million, explains Joe Terranova. Now it’s trading about 3 million shares per day. To me that means the market is very risk averse and as a result I got out of my position.
On a valuation basis I like Google, counters Guy Adami. It’s a volatile stock but it only trades at a 20 multiple. I see value here.
I’m waiting for Google to pull back to $460, adds Jon Najarian. Then it's a buy.
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Trader disclosure: On Aug 26, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Tatro Owns (C), (GS); Quint Tatro Is The Principal Of Tatro Capital; Tatro Capital Owns (QQQQ), (SSO), (SPY), (FXI), (XLF), (IHI); Jon Najarian Owns (C), (EXM), (JPM), (UNG); Jon Najarian Owns (AAPL) Calls, (MRVL) Calls, (RMBS) Calls, (EWH) Calls; Jon Najarian Owns (PTEN) Call Spread; Terranova Owns (AAPL), (RIMM), (EOG), (VLO), (YHOO), (NOV), (KOL), (GS), (POT), (SA), (FCX); Terranova Owns (AIG) Puts
Terranova Is Chief Alternatives Strategist Of Phoenix Investment Partners, Ltd.; Phoenix Investment Partners Owns More Than 1% Of (ABD), (ARE), (BRE), (CNTY), (CLB), (OFC), (DLR), (ESS), (EXR), (FL), (IAT), (IGE), (LNET), (MAC), (OIIM), (PSPT), (DBC), (DBV), (SLB), (SKT), (BLV)