Misses across the board

Alphabet missed analysts’ expectations by quite a large margin. The main point of disappointment was the monumental slowdown in revenue growth. This came in at 6% compared to 41% the year before. Meanwhile, its bottom line suffered a huge decline of 24%.

Advertising is Alphabet’s largest revenue generator. As such, it was a relief to see some modest growth there. But what was disappointing to see was the drop in YouTube revenue, which further soured investor sentiment surrounding Alphabet stock.

Having said that, the board attributed the overall drop in revenue growth to a number of factors. The first was a decrease in overall ad spending from businesses. This was further exacerbated by a strong US dollar which made revenue conversion from foreign currencies to the greenback more expensive. Additionally, Play Store revenues saw a decrease as gaming interest declined.

Time is ticking on Shorts

Moving onto YouTube, it was refreshing to see the platform’s short-form content continuing to gain momentum. CEO Sundar Pichai also disclosed that ads on Shorts were launched in September, which finally opens up a revenue stream for the new segment. Moreover, YouTube will start sharing ad revenue with its creators from next year, in a bid to fend off competition from TikTok.

This news should’ve brought a jump to Alphabet stock. However, an excellent question from Morgan Stanley analyst Brian Nowak derailed any excitement. Nowak questioned whether the increased user time spent on Shorts was at the expense of YouTube watch time itself, to which CBO Philipp Schindler reluctantly confirmed.

Shorts viewership grew as a percentage of total YouTube watch time.

CBO Philipp Schindler

This was most likely one of the main reasons behind the drop in YouTube revenue in Q3. After all, traditional, longer YouTube videos have a tendency to generate more advertising revenue than its short-form counterpart.

Therefore, YouTube will have to find ways to monetise Shorts at the same rate as its traditional video formats, as TikTok continues to snatch revenue away. Either way, I’m expecting the introduction of new ad formats such as discovery ads, video action campaigns, product feeds, and live commerce to help YouTube’s revenue rebound.

Every Cloud has a silver lining

Despite the generally downbeat numbers, shareholders did have something to celebrate. Google Cloud has long been touted as a long-term growth catalyst for Alphabet stock, and its Q3 numbers showed just why, as revenue grew by an impressive 38%.

Nonetheless, Cloud’s overall net income took a step back, as it finished Q3 with a $699m loss. Its revenue still grew at a faster pace than in previous quarters, however. Not to mention, given that the majority of its expenses were investments in data centres and recruitment, profitability should be achievable once expenditures start to taper off.

Furthermore, Google Cloud has a strong revenue backlog of approximately $26.2bn, ensuring strong future growth momentum, which should be further aided by the recent acquisition of Mandiant. This new asset adds cybersecurity to Cloud’s list of ever-expanding features as an open platform, improving the product’s competitive edge.

Ruthless costs

So, what were the reasons behind Alphabet missing its bottom line estimates then? Well, the company’s operating and capital expenditures saw increases of 27% and 33%, respectively. Most of these expenses were attributed to investments in data centres, so this is understandable given the aggressive growth in Google Cloud.

That being said, I’m puzzled by the acceleration in headcount growth. The Nasdaq-listed firm added 12,765 workers in Q3, when Pichai mentioned his intention to slow down hiring in Q2. On the earnings call, Pichai was asked to provide examples of internal key performance indicators or quantifiable analysis to justify the hiring. Instead, he gave a rather generic response, which doesn’t exactly soothe investors’ nerves when Alphabet stock is already down by more than 30% this year.

Talent is the most precious resource, so we are constantly working to make sure everyone we have brought in is working on the most important things as a company.

CEO Sundar Pichai

Buy the dip?

With all that in mind, do I still rate Alphabet stock a buy for my portfolio? Well, the firm didn’t have a terrible quarter as a whole, especially given the current recessionary backdrop. In fact, revenue actually grew 11% on a constant currency basis.

Besides that, further improvements in Search, Shorts, and Cloud show that the future remains bright. And with its balance sheet still in a robust state, I’ve no doubt that Alphabet will be able to plow through a potential recession without any issues.

On the flip side though, questionable decisions, particularly surrounding headcount growth, and the vague answers to questions don’t give me as much confidence in the board as I used to have. Even so, I’m still hopeful that Alphabet will be able to deliver excellent return on investment, given its historical return on assets (18.3%) and return on equity (26.4%). Not to forget, the tech giant still has $43.5bn worth of stock buybacks to complete.

Most importantly, Alphabet stock still has the backing of many brokers. The likes of Citigroup, Wells Fargo, and Bank of America opted to reiterate their ‘buy’ ratings for the stock. For that reason, I think the downside risks for Alphabet remains low for the time being. And with a historically low forward price-to-earnings (P/E) ratio of 18 and an average price target of $130.20, I’ll be looking to buy more Alphabet stock for my portfolio.

According to Buffett, investing success doesn’t take a huge amount of intelligence. Patience and discipline are far more important on the road to getting rich.

Buffett’s approach has two parts. The first involves identifying predictable businesses and the second involves waiting for them to be available at attractive prices.

With both the FTSE 100 and the S&P 500 down this year, I think that there are some stocks that fit the bill. So here’s how I’d invest £1,000 using the Warren Buffett method today.

Google

Top of my list is Alphabet (NASDAQ:GOOG). Both Warren Buffett and Charlie Munger have previously said that they regret not buying shares in the company a long time ago. 

Google receives around 5bn search queries per day and accounts for around 84% of the global search engine market. It dominates the online search industry and I don’t see that changing any time soon.

With such a large market share, there might be a risk that the company’s growth is mostly behind it. But I think there are two things that offset this risk.

The first is that the organisation continues to generate strong revenue growth. Over the last five years, the company’s revenue has increased by an average of 23%.

Second, the stock is down 33% since the start of the year. At today’s prices, I think that the business can provide an attractive return just by growing steadily.

I think that Google is a great example of a stock to buy for my portfolio using the Warren Buffett method. That’s why I’d allocate £650 of a £1,000 investment into the stock.

Aviva

With the remaining £350, I have a few ideas on my radar. I think that Forterra, Howden Joinery Group, and Starbucks are all predictable businesses at attractive prices today.

Any of these would, in my view, be a good investment for me with £350. But looking to follow the Warren Buffett method, I’d invest in Aviva Preferred 8.375% (LSE:AV.B) shares.

I think this fits the bill perfectly in terms of predictability at an attractive price. And a lot of Buffett’s success has come from buying preferred stocks.

Unlike common stock, preferred stocks pay a fixed dividend that can’t be lowered. That makes their future cash generation highly predictable.

In the case of Aviva’s preferred, each share pays 8.375p per year. At today’s prices, that’s a return of 7.3% in perpetuity, which I see as attractive.

The downside to this type of investment is that the dividend won’t increase. And there’s a risk that rising interest rates might cause the stock to fall as the dividend yield looks comparatively less attractive.

For me, though, this isn’t a problem. A falling share price just gives me the chance to reinvest my dividends at a higher rate. 

Even if the share price stays where it is, though, I can generate a good return by reinvesting the income I receive. Starting with £350 today, a 7.8% return means my investment could be worth £3,280 after 30 years.

Alphabet Class A vs Class C Stock

Like many other companies, it possesses different types of stock. It makes both its Class A and Class C stocks available to trade on the public stock market. So, what distinguishes one from the other?

Well, the two stocks actually trade at separate price levels. However, they trade in tandem with each other and usually aren’t more than 1% apart. The main distinction though, is that Alphabet Class A stock holds voting rights and an ownership stake of the company, while Class C stock just gives shareholders the latter. It’s for that reason that I opted to purchase the conglomerate’s Class A stock.

Therefore, if I’d invested in Class A stock five years ago, I’d have a return of 94%. Meanwhile, I’d have a return of 99% if I’d invested in Class C stock. This is what it would translate to in real income, inclusive of exchange rates and excluding broker fees and capital gains tax.

As we can see, although the growth of Alphabet stock was approximately 95%, investing over five years ago would have more than doubled my investment. That’s because of the impact of a weak pound and strong dollar today. If we’re to compare this to the performance of the US’s three main indexes, Alphabet still outperforms by quite some margin.

Stay invested?

What about the future then? Well, given the sector the Nasdaq-listed company operates in, technology remains a key driver for the future of society. As such, I expect Alphabet stock to continue growing in the coming years.

The tech firm will be reporting its Q3 results later this month, which is a key event I’ll be paying close attention to. That being said, the stock has been performing rather poorly this year. This is due to bear market conditions as a result of high inflation and rising interest rates, sparking fears of a recession. Nonetheless, here are its earnings estimates going into its Q3 earnings release.

Stocking up

Having said that, will I continue to buy Alphabet stock? Well, for starters, the tech company has an immaculate balance sheet, with a stellar debt-to-equity ratio of 5%. Not to mention, the firm has an excellent history of growing its top and bottom lines, as well as maximising its return on equity (28.2% vs the wider industry’s 7%). Additionally, its healthy profit margin of 25.9% just goes to show that Alphabet is capable of churning out quality earnings, even in times of difficulty.

Although past performance is no indicator for future returns, the company has a lot going for it. Being the world’s go-to home for search and video, while having an arsenal of growth prospects in cloud, autonomous driving, and AI, Alphabet has attributes of both a defensive and growth stock. It’s for those reasons that I’ll be using the current bear market as an opportunity to hopefully continue growing my wealth by purchasing more Alphabet stock.

Snapping back

With Alphabet missing both its top and bottom line consensus, I was surprised to see the stock pop as high as 5% in after-hours trading. There could be several reasons for this. However, I’d attribute it to the increase in advertising revenue despite Snap’s lacklustre Q2 earnings last week, which warned of lower ad spend last quarter.

Having said that, all of Alphabet’s core businesses saw growth on a year-on-year (Y/Y) basis. These figures defied the doom and gloom Snap posted in its earnings report, which spooked the stock market into a sell-off.

Vision for the future

So, with an increase in its top line, why did the Nasdaq-listed firm see a decline in its EPS? The two main culprits were higher labour costs and further investments in tech. CEO Sundar Pichai said the tech giant is planning to continue heavily investing in developing its offerings.

The latest AI-integrated search features are already showing promise, as Multisearch and Google Lens have seen increasing levels of adoption among users. The feature brings up relevant information related to objects it identifies using visual analysis. This allows people to use text and images at the same time, while giving users the ability to ask questions about what they see.

On the YouTube front, Alphabet announced a partnership with Shopify last week. This collaboration enables Shopify merchants to feature their products across YouTube channels and content. And with YouTube Shorts continuing to grow fast, this feature could help to monetise it.

As for Cloud, I was happy to see revenues continuing to hit fresh highs. Pichai confirmed that demand for the service remains robust, with more enterprises expected to come on board as new features get added. The acquisition of Mandiant that’s expected to be completed by the end of the year should also help with this. As the bulk of the company’s capital expenditure went towards servers and data centres, I’m confident in Cloud’s long-term earnings potential.

Returning for more

Although such developments excite me as an investor, I’m well aware of the risks associated with investing in Alphabet. There’s the obvious macroeconomic headwind that’s expected to dent ad spend in the near term. This was confirmed by CFO Ruth Porat on the earnings call.

More worrying is the rise of TikTok. Google exec Prabhakar Raghavan admitted around 40% of Gen Z users prefer searching via TikTok or Instagram over Google. If it fails to improve its search features or win over users, Alphabet’s core business could be compromised.

Yet, I have confidence in this experienced team to continue developing its products and services, and fend off competition. The board has shown its ability to return value to its investors time and time again.  In fact, Q2 hosted the biggest share buyback in the company’s history. Therefore, I remain bullish and will look to buy more Alphabet stock for my portfolio while it’s cheap.

Heading Dow-wards?

The sole reason for the drop in the Alphabet share price is its recent 20-to-1 stock split. Those who held the stock when the US market closed on Friday were awarded 19 additional stocks for every stock they held. The value of each stock has been divided by 20 as well.

According to the board, the reason for this split is to encourage higher trading volume while making access to Alphabet stocks easier. However, this is a double-edged sword. While a ‘cheaper’ stock encourages more volume to boost its share price, it also means that it’s more vulnerable to being shorted and driving the share price down. This is a genuine risk considering the negative sentiment surrounding the current bear market.

Nonetheless, the main prospect from the stock split is Alphabet’s potential entry into the coveted Dow Jones index. The index includes 30 of the most prominent companies listed on US stock exchanges. Given Alphabet’s prominence, analysts are predicting it’s a matter of when and not if the NASDAQ-listed firm gets inducted. If this happens, I expect the Alphabet share price to rally, as institutions tracking the index will have to purchase the stock.

What now?

Despite the excitement surrounding its stock split, the Alphabet share price is still down 20% this year. Fears of a recession have led investors to speculate that growth in advertising spending, Alphabet’s main source of revenue, will stall. As such, analysts’ earnings per share (EPS) estimates have seen downward revision over the last 90 days.

Alphabet’s stock plunged after it reported its Q1 earnings results, as some key figures fell short of analysts’ expectations. Slowing advertising spending from the Russia-Ukraine conflict along with currency headwinds were some of the reasons cited by management for the underperformance. But with Alphabet set to report its Q2 results next Tuesday, I’m hoping that there will be better news. EPS is expected to come in lower than a year ago. But I’ll be paying close attention to the guidance provided, in hopes the group is on track to achieve 15% revenue growth for the year.

Searching for profits

Alphabet stock is currently the largest holding in my portfolio, so should I be buying more? Well, the company has a flawless set of financials to begin with. A 5.1% debt-to-equity ratio and a mountain of cash ($134bn) puts it in an excellent position to grow and withstand an economic downturn. Additionally, it boasts high-quality earnings with excellent growth prospects from its latest developments. These include YouTube Shorts, Google Cloud, Google Workspace, Waymo, and even an improvement to Google Search.

So, with an average price target of $158.98, this gives the current Alphabet share price a 40% upside. As such, I’ll be looking to buy more of its stock as I believe Alphabet has the potential to substantially increase my wealth in the long term.

Banks

The major US banks report their quarterly earnings this week. I’ll be keeping a close eye on what they say.

Banks play a central role in economic activity. As such, their reports are often seen as a good indicator of the state of the wider economy. If the bank reports indicate that the US economy is slowing substiantially (or that it is about to) then I think that a stock market crash could be imminent. 

A bleak economic outlook could cause estimates of corporate earnings to come down. And I think that lower earnings estimates is likely to result in lower share prices.

Share prices

In the first half of the year, stocks have been falling due to high inflation and rising interest rates weighing on share prices. Despite this, analyst expectations for corporate earnings remain strong.

Take Alphabet (NASDAQ:GOOG) for example. Of the 13 analysts offering earnings forecasts for Alphabet this year, only one has revised their forecast down recently.

Alphabet’s share price has fallen by 17% since the start of the year. As a result, the stock now trades at $2,400 per share.

The company is forecast to generate $110.62 in earnings per share this year. The current share price therefore implies a price-to-earnings (P/E) ratio of around 21.

At this level, I think Alphabet shares look like good value. As a result, I’ve been buying the stock this year.

Earnings

The difficult economic environment might cause Alphabet’s earnings to come in lower than expected, though. If this happens, the stock starts to look expensive. 

Alphabet’s earnings this year coming in at $100 per share would mean that the current share price implies a P/E ratio of 24. Earnings at $90 mean the P/E ratio is 27.

At these levels, Alphabet stock looks much less attractive. So if it seems that Alphabet’s earnings are going to be closer to $90 than $110, I expect the stock to fall significantly to compensate for this.

It isn’t just Alphabet stock that I’m expecting this from. I think that a decline in expected earnings might well lead to a crash in share prices across the board.

A stock market crash?

So far this year, share prices have been falling as rising interest rates weigh on valuations. Stocks look cheap right now because they trade at lower P/E ratios than they used to.

If earnings expectations come down, P/E ratios will increase and stocks will look expensive again. I think this will cause share prices to crash. 

I think that the earnings reports from the major US banks this week might cause expectations of future earnings to fall. As such, I’m preparing for a stock market crash in the near future.

For investors and consumers alike, inflation has one of the dominant themes of the first half of 2022. According to the latest readings, prices are around 8% higher now than they were a year ago.

It also looks as though inflation isn’t over yet. The Bank of England warned this week that the situation is likely to get worse before it gets better.

Inflation is also problem for businesses because it pushes up costs. Higher costs means lower margins, which in turn means lower earnings. There are two types of inflation-resistant businesses. The first type are able to pass the higher costs on to customers by increasing their prices.

The second type are able to nullify the impact of inflation by having low capital requirements. These businesses are protected from inflation because their costs increasing makes little difference to the overall business.

I think there are two stocks in my portfolio that especially inflation-resistant. Furthermore, I’d be happy buying either at today’s prices.

Games Workshop

My first stock to buy now is Games Workshop (LSE:GAW). The company is protected from inflation by its low capital requirements.

Games Workshop’s ongoing investment requirements are low, accounting for less than 1% of the cash it generates. Furthermore, the business produces £148m in operating income using just £96m in fixed assets.

As a result, even if inflation were to double Games Workshop’s input costs, the business would still generate substantial cash flows for its shareholders.

Games Workshop’s share price has fallen by 33% since the start of the year. At these prices, I’m happy to increase my ownership in the business.

Google

I also think that Google (NASDAQ:GOOG) is a great stock and I’m looking at buying it now. Unlike Games Workshop, Google’s main protection against rising costs comes from its pricing power.

Google is part of a conglomerate. But the overall company is dominated by the core search engine business, which generates around 99% of total revenues.

With around 4.3bn users, Google is the largest digital advertising platform. It’s significantly bigger than its next largest competitor, Meta Platforms, which has around 3.6bn users.

This means that Google has something that its customers can’t get anywhere else. Companies that want to reach the most people have to use Google, which gives it pricing power.

As with Games Workshop, Google’s share price has been falling lately. Since the beginning of January, Google shares are down around 25%, bringing the stock to a level that I’m happy buying at for my portfolio.

Recession risk

Both stocks have the same major risk. If a recession slows down spending, then both businesses could find their profitability impacted.

In my view, though, this risk is offset by the discounted price of each company’s shares. With neither company having any substantial debt, I think that the P/E ratio is a good metric to use for valuing these businesses.

Games Workshop’s stock trades at a price-to-earnings (P/E) ratio of around 18 and Google’s share price implies a P/E ratio of around 20. With modest growth, I think that both businesses can be great investments for me over the next decade.

However, the global behemoth should be able to easily ride out any economic slowdowns. I see this as a great opportunity for me to buy a quality company at a discount. Here are four reasons why I’ve been buying.

1. Stock split

Alphabet’s 20-1 stock split happens on July 15. While this won’t change its overall market value or capitalisation, it could create value for shareholders indirectly. Firstly, retail investors may find a share price of $110 more attractive/affordable than the current level of around $2,200. This will particularly be the case for those using a broker that doesn’t offer fractional shares. Secondly, the lower share price could lead to Alphabet’s inclusion on the Dow Jones Industrial Average. As this index is widely followed by institutional investors, funds that track it would need to buy Alphabet stock, giving it a short term tailwind. But the long-term growth is coming from elsewhere.

2. Google Cloud Platform

That long-term growth could come from Google Cloud. This business currently accounts for 7% of Alphabet’s total revenue, approaching $20bn. It’s the third-largest cloud infrastructure platform globally, behind Amazon Web Services (AWS) and Microsoft Azure. It’s only a distant third with an 8% market share, while AWS and Azure have a combined 55%. However, Google Cloud grew 53% in 2019, 46% in 2020 and 47% in 2021. If this trajectory continues, Alphabet will be less reliant on its core advertising business.

3. Advertising juggernaut

Not that its ad business is a bad thing. Over the last decade, it has boasted an average annual growth rate of more than 19%. In the first quarter of 2022, it accounted for around 80% of Alphabet’s total revenue. Remarkably, in Q4 2021, Alphabet-owned Youtube’s revenue alone was $900m higher than that of Netflix. Youtube’s monthly active users should be relatively recession-proof too. As inflation bites, many may cancel their paid subscription streaming services, but continue enjoying Youtube’s free ad-based platform.

There are macroeconomic headwinds facing most businesses, of course. And Alphabet won’t be immune to these challenges if advertisers cut spending. Additionally, its near monopoly on search and dominance across the internet makes the business an antitrust target. There’s a possibility that regulators could push to break up Alphabet for suppressing competition. Excluding this, I think its stranglehold on ad revenues should continue.

4. Cash flow machine

The S&P 500 index has entered bear market territory, down 20% for the year. In this environment, I’m trying to invest in ‘quality’ businesses. I believe Alphabet falls under that category despite underperforming the S&P this year. That’s because the business possesses the desirable combination of high returns on capital and high growth. Its strength in advertising helped generate $67bn in free cash flow last year. Revenue is forecast to grow 15% year on year in 2022 and another 15% in 2023. The current price-to-earnings ratio of 20.8 is its lowest valuation in a decade. Consequently, the stock looks great value to me. I’m buying.

Is he right? And if so, what should I do?

Bear markets

By definition, a bear market occurs when stocks fall by 20% or more for an extended period of time. Statistically, bear markets happen roughly every four years.

This means that I’m likely to see a few bear markets during my investing career. But Baron has three reasons for thinking that this might be the investing opportunity of a lifetime.

First, stocks are trading at cheap prices. Second, corporate earnings are growing strongly. Third, businesses are producing stronger returns on fixed assets.

Great businesses at bargain prices

From my perspective, a lot of this rings true. There are some businesses that I think very highly of that are trading at valuations that seem attractive to me.

One of the best examples of this is Google (NASDAQ:GOOG). This is a stock that, as far as I can tell, meets all three of Baron’s criteria. 

Google shares currently trade at a P/E ratio of around 19. Over the last five years, the stock has traded at an average P/E ratio of around 25.

Normally, I wouldn’t value a business just using its P/E ratio. But for a company like Google, which has extremely low debt, I think that the P/E ratio is informative.

The company has also been growing its earnings strongly and is forecast to continue to do so. Analyst forecasts for the next five years anticipate earnings growing at around 15%. Of course, forecasts can change based on future developments.

Google is also the kind of asset-light business that Baron has in mind. With no factories, manufacturing plants, or shops, the company generates $82bn in operating income using $110.5bn in fixed assets.

Risk

Google is a really good example of a stock that’s fallen into buying territory for me. The share price has come down by around 12% over the last year.

But the stock hasn’t fallen for no reason. There’s investment risk associated with Google shares and that’s been weighing on the share price.

The main risk, in my view, is the possibility of a recession impacting Google’s business. If its earnings fall (or even if they grow more slowly than expected) then its P/E is likely to increase.

That will make the stock look expensive. In response, I think that the price might fall.

Conclusion: a once-in-a-generation-opportunity?

I’m not convinced that this bear market is a once-in-a-generation opportunity for investors like me. I think that markets might have further to fall, especially if a recession hits corporate earnings.

Nonetheless, I do think that there are some great companies trading at attractive valuations at the moment. Google is one example that I’ve been buying for my portfolio.

For me, the key question isn’t whether share prices will be lower at any time in the future. I don’t think I can accurately predict where the stock market will go from here.

The question for me is whether share prices are low enough right now for the business to provide me with a decent return. And in a number of cases – most notably Google – I think they are.

Recent performance 

Over the past six months, the Alphabet share price has largely tracked the Nasdaq index, falling around 25%. In the past year, it has fallen 12%. Alongside reacting to the general tech sell-off, there are several other reasons for this decline.

Firstly, inflationary pressures are causing large issues for the tech giant as other companies are being forced to reduce their advertising budgets to deal with increasing costs. As Alphabet makes most of its revenues from digital advertising, this may mean declining revenues for the group.

Secondly, YouTube, which makes up over 10% of Alphabet’s revenues, is facing rising competition from the likes of TikTok. This has caused YouTube’s growth to slow to around 14% in the first quarter, which could cause further negative investor sentiment.

The strengths 

Evidently, there are several risks with Alphabet shares. However, in comparison to other growth stocks, I believe that the company is well equipped to deal with these pressures. 

For one, there were many positives to take away from the recent results. Indeed, net income from operations rose to over $20bn, up from $16.4bn last year. This highlights that the firm’s operations are performing resiliently in the current macroeconomic climate.

Further, I’m impressed by the firm’s diversified business model. For instance, alongside its large advertising business, it’s also one of the global leaders in the cloud market, which is experiencing strong growth right now. For instance, in the Q1 results, the company’s cloud revenues rose 43% year-on-year to $5.8bn. Amid surging revenues, I equally feel that the cloud business is close to profitability. This factor could help the Alphabet share price surge. 

What am I doing with this growth stock now? 

For me, Alphabet is a no-brainer buy at its current price and therefore, I’ve initiated a position recently. Indeed, it currently trades at a price-to-earnings ratio of under 20, placing the growth stock at similar valuations to companies in very low-growth industries. This indicates that the Alphabet share price may have now reached the bottom. 

And the company has authorised a share buyback programme of $70bn, which should help boost metrics such as earnings per share. It also indicates that management feels the current share price is too low. I share this view and will continue to add to my position during the current bear market.