Google shares at new highs; up 700% since 2004

Its surge to new highs has come as its Android software dominates the mobile phone market and it continues to lead in mobile advertising. The gains have put Google firmly in third place among U.S. companies in terms of market value after Apple Inc. and Exxon Mobil Corp.

Google has been on a steep rise since late last year, hitting new highs multiple times, and is up 16.1 percent since the start of the year. That makes it the highest-priced stock in the S&P 500 by more than US$100 and puts it within striking distance of the median analyst price target of US$851 a share, according to Reuters data.

“It seems to be the big momentum stock right now,” said Eric Kuby, chief investment officer at North Star Investment Management in Chicago, whose firm does not own Google.

At least two brokerages — Sanford Bernstein and Credit Agricole Securities — believe the stock could hit US$1000 a share before long and several others have a price target of more than US$900.

Still, at least one insider, has decided it is time to bail out of a big slab of his stock. Google Executive Chairman Eric Schmidt recently filed to sell roughly 42 percent of his stake in the Internet search company, citing “individual asset diversification and liquidity,” according to U.S. Securities and Exchange Commission filings.

Schmidt owns roughly 7.6 million shares of Class A and Class B common stock. Google said in a filing in early February that Schmidt planned to sell the 3.2 million shares of Class A stock in a stock trading plan over a period of a year. At current value, that would be worth about US$2.6 billion.

Wall Street has grown more sanguine about Google's transition towards a more mobile-focused strategy.

It has attempted to extend its lead in Internet search advertising onto a mobile platform, a shift forced by the increasing prevalence of smartphones and tablets, but that eats into margins. Over the past year, however, Google has managed to slow the average pace of ad-rate declines, while its Android platform continues to expand its lead over rivals such as Apple's iOS.

“Mobile search is doing well and mobile is the future,” said Kerry Rice, an analyst at Needham & Co. “Few companies are as well positioned for the coming mobile-centric world we live in better than Google.”

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