Stock
Market for Google, Apple, and Ford Motors
Google,
Ford Motors, and Apple are some of the largest American multinationals trading on the New York Stock Exchange. Google and
Apple are tech firms while Ford Motors is a car manufacturer. The over the past
decade, these three firms have grown exponentially because of innovation,
effective management, and a good
investment. As a result, the three organizations have gained the investor’s
confidence, explaining the impressive stock performance over the past 12 weeks.
Google
Google
is an American technology firm founded by Sergey Brin and Larry Page in the
year 1998. Google’s mission is to ensure
universal accessibility and usefulness of the world’s information by organizing
it using technology. Both the founders of Google own 15% of the shares, though
they also control more than 55% of the stockholder voting power. Google’s
unofficial slogan coined in 2004 is ‘don’t be evil.’
Google
specializes in the provision of internet-related products and services such as
search engine, software development, online advertising, and cloud computing.
However, the organization derives most of the profit from the commercialization
of Adwords. AdWord refers to an online advertising platform where client’s
adverts are placed near the search results list and the clients pay per every
click made by the internet users.
In
the technology sector, there is a stiff competition. Google experiences
competition, especially for its search engine and advertisement products from
start-ups and old rivals such as Yahoo and Microsoft’s Bing. Other major
competitors include AOL and Linked In (a career and business social media).
Still, Google has expanded its services rapidly to the fast growing markets and
the developing world such as China and Africa. 
Google’s
stock performance dropped for a few months after the financial crisis. However,
as indicated in graph 1, the firm has performed steadily since (Warren 561).
The positive performance in the stock market is attributable to Google’s entry
into smartphone market by manufacturing
an open-ended android operating system to
compete with Apple and China mobile. Google’s growth path is healthy because of
increasing net income and revenues. The optimism of investors is boosted by
positive gains in advertisement, revenue, given that Google lacks serious
competition in the sector.
Google
rebranded to Alphabet to separate investments for its other projects such as
Motorola and YouTube (Grant 668). Google’s management understand the importance
of business diversification and expansion. Therefore, rebranding improves the
organization’s image for marketing purposes. Since the firm became Alphabet,
its market performance in NYSE has improved significantly.
According
to market analysts, Google’s diversification of product delivery, especially in
the European and domestic American market has allowed the firm to solidify its
market leadership and to set a trend in terms of creativity and innovation.
During late 2015, the firm rebranded to Alphabet.
Considering
the history of Google’s performance in the market and the diversification of
its products, I recommend that the investors should buy the stock. Google
invests heavily in research and
development, hence will develop innovative products for an increase in future
sales revenue and profitability.
Apple
Apple
is a US multinational tech organization headquartered in California, Cupertino.
Steve Wozniak and Steve Jobs established
Apple in the year 1976 and it specialized in the development of personal
computers. Today, Apple designs and sells computer software and electronics.
The company also provides online services such as cloud computing and
advertisements. Apple’s mission statement is to revolutionize the technology
industry through the introduction of innovative products.
Apple hardware products include Mac personal computer,
Apple smartwatch, and iPad tablet computer. iPhone smartphone is a major driver
of Apple’s revenues and profitability. Regular annual upgrade of iPhones
ensures increased sales especially in countries with large markets such as
India and China. However, stagnation in innovation witnessed over the past one
year has resulted in a drastic drop in sales of the latest version of Apple
iPhone. The development worries investors, thus affecting the stock market
performance.
Creativity and innovation sustain
Apple’s competitiveness in the industry. However, the death of Steve Jobs in 2011 dealt
a significant blow to Apple’s performance. The former CEO was a visionary
innovator (Lusted 33). Therefore, it became harder for Tim Cook (his successor)
to keep up the innovation standards at Apple. While Apple expands its
operations to the developing world, it faces a fierce competition from
Microsoft’s Windows OS and Google’s Chrome browser. In addition, Google’s
Android OS for smartphones is considered partially responsible for the drop in iPhone sales globally. 
According
to the stock data, Apple grew steadily from 2009 (Graph 2). The introduction of iPad and iPhones resulted
in the improvement of the market performance and stamped the organization’s
position as a market leader in smartphone innovation. Still, the drop in sales over the past twelve weeks (as shown
in table 2) indicates stronger competition from other tech organizations. In
fact, the observed negative changes confirm the investor’s worst fears on
Apple’s inability to sustain creativity and profitability.
The
recent apple launch of the Apple Watch has been widely publicized. Strong
initial sales of this innovative product raise the investor’s confidence.
However, analysts claim that the Apple Watch’s supply may be constrained. Moreover,
Apple Pay is gaining recognition, especially
in the domestic market. Thus, it can help
boost the organization’s performance.
Market
analysts argue that apple’s success between 2011 and 2015 has lead to a loyal
customer base, desirable products, and brand recognition. Between this
timeframe, the customers have been willing to pay a premium due to Apple's value and prestige. Yet, Apple’s
investors expect the corporation to regularly innovate products and to beat the
modeled annual earnings and revenues.
Considering this, Apple’s stocks are certain to fail if the organization does
not launch revolutionary products consistently.
Based
on the tracking, Apple’s market performance for the next year will be volatile unless an innovative product is
introduced in the market. Apple currently does not have major plans or clear
strategies to upgrade their products. Therefore, I recommend investors to sell
their stock.
Ford
Ford
Inc. is American automaker whose headquarters are in Michigan, Dearborn. Henry Ford founded the organization during the early 1900s. The Ford’s mission is to improve
the lives of people globally by ensuring leadership in mobility and automotive
industry.
Ford
produces and sales commercial vehicles, automobiles and luxury cars.
Ford
engages in the production of environmentally friendly automobiles. For instance, Crown Victoria uses compressed
natural gas as an alternative to fossil fuels. In
addition, the organization produces hybrid electric vehicles to minimize
overreliance on renewable energy. Since 2010, Ford partners with Toyota to
produce half a million hybrid vehicles annually. Chargeable electric batteries
mostly power these cars. Besides, the organization experiments with hydrogen as
a potential fuel to power future cars.
Some
of Ford’s competitors include Toyota, Mercedes-Benz,
and General Motors. Organizations such as these invest heavily on research and
development to produce energy-efficient cars. In particular, Toyota has a larger market
share because its cars are affordable, especially in the developing world.
Besides, General Motors and Toyota have manufacturing plants countries where
the cost of operation is low due to cheap labor
such as China and India. 
Ford’s
performance, though mostly positive, has been tumultuous since 2009. The 2008’s
global recession affected the organization’s revenues, stock, and sales
remarkably as shown in graph 3. Moreover, Ford faces a stiff competition from rivaling firms and Asian car manufacturers. Disappointing
results and weak performance in the domestic market lowered the level of
investors’ confidence during February, though stocks have since rebounded.
During
January 2016, the corporation reported its earnings per share of 1.83 dollars.
In comparison, the previous year’s EPS was 30 cents. Ford’s performance is
highly reliant on the loyal customer’s ease of access to debt financing. During
the years when the global economy is weaker, the demand for Ford’s automobiles
falls sharply, so does its stock performance.
Between
2011 and 2015, Ford’s management allocated a significant amount of resources to
market research and development to improve the production of future cars.
Though the move is risky, the Ford’s success in the production of less costly
hybrid cars will mark a shift in the market that earns the organization higher
revenue and a larger market share (Caroll 71). If this is the case, the
organization will experience an increase of investment in its stock.
I
recommend that the investors should observe the global economic performance
before making decisions on whether to sell or buy Ford’s stock. There is a
strong link between the performance of Europe and America’s economy and Ford’s
stock market. Still, at the moment, the sale
of Ford’s stock is the most viable option.
Work
Cited
Carroll,
Richard J. The President as
Economist: Scoring Economic Performance from Harry Truman to Barack Obama.
Santa Barbara, Calif: Praeger, 2012: 68-79. Print.
Grant,
Robert M. Contemporary
Strategy Analysis: Text and Cases. , 2016: 668-669. Print.
Lüsted,
Marcia A. Apple: The Company
and Its Visionary Founder, Steve Jobs. Minneapolis, MN: ABDO Pub,
2012:1-46. Internet resource.
Warren, Carl, James Reeve, and Jonathan Duchac. Financial & Managerial
Accounting. London: Cengage Learning, 2013: 560-582. Print.
No comments:
Post a Comment