Equity Clock

Arithmetic Average Seasonal Chart

Geometric Average Seasonal Chart

GOOG Relative to the S&P 500

GOOG Relative to the Sector

% of Revenue Generated in Each Quarter

% of Free Cash Flow Generated in Each Quarter

% of Net Income Generated in Each Quarter

Seasonal Chart Analysis

Analysis of the Alphabet Inc. – Class C (NASD:GOOG) seasonal charts above shows that a Buy Date of April 27 and a Sell Date of August 13 has resulted in a geometric average return of 5.85% above the benchmark rate of the S&P 500 Total Return Index over the past 8 years. This seasonal timeframe has shown positive results compared to the benchmark in 7 of those periods. This is a very good rate of success, but the return underperforms the relative buy-and-hold performance of the stock over the past 8 years by an average of 0.02% per year.

The seasonal timeframe correlates Poorly with the period of seasonal strength for the Industrials sector, which runs from October 29 to May 10. The seasonal chart for the broad sector is available via the following link: Industrials Sector Seasonal Chart.

A word of caution: Only 8 years of data is available for shares of GOOG, perhaps insufficient to create a seasonal profile that accurately gauges the seasonal tendencies influencing the investment. Ideally, while 20 years is preferred, at least 10 years of data is required to perform a seasonal analysis that is considered to be reliable for future seasonal periods.

Alphabet is a holding company. Internet media giant Google is a wholly owned subsidiary. Google generates 99% of Alphabet revenue, of which more than 85% is from online ads. Google’s other revenue is from sales of apps and content on Google Play and YouTube, as well as cloud service fees and other licensing revenue. Sales of hardware such as Chromebooks, the Pixel smartphone, and smart home products, which include Nest and Google Home, also contribute to other revenue. Alphabet’s moonshot investments are in its other bets segment, where it bets on technology to enhance health (Verily), faster internet access to homes (Google Fiber), self-driving cars (Waymo), and more. Alphabet’s operating margin has been 25%-30%, with Google at 30% and other bets operating at a loss.

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Stocks mentioned in this post: GOOG