By Chad Brand



) - It was hard for


to stop talking about


(GOOG) - Get Report

inadvertent and premature earnings release on Thursday, but the logistical topics of the leak should largely be ignored by longer-term investors. The reasonable question is whether the stock is attractive after a one-day, 60-point decline. While it may seem like an opportunity, one needs to keep in mind two things.

First - where the stock has traded in recent months. The shares remain $150 above their 52-week low thanks to an enormous rally lately. And even more importantly, the stock's valuation, while not excessive by any means, hardly screams cheap in my view.

Let's understand that the leaked earnings release is not the real story here, even though that is what got the most airtime on


and throughout the financial media. The stock would have declined the same amount regardless of when the earnings figures were released. In this case, the numbers are what matter. As a result, I would downplay the significance of the leak in terms of how it might dampen individuals' enthusiasm for the stock market. This is a non-issue for me, and I do not think investors in Google really care that the numbers were leaked. If you liked Google's outlook before the report, you have reason to question the weakness in their business last quarter, but you would still be facing the same decision, even without the leak. I do not think there is any reason to think you somehow were hurt by the mistake. The bottom line is that Google shares are now trading in the 600's, not the mid 700's, thanks to lower-than-expected click prices and higher-than-expected losses in the newly-acquired


business. These are the issues we should be talking about.

To me, Google shares are not cheap enough to buy, even after a fairly large decline. At around $700 per share, they trade at a premium to the S&P 500, at about 17.5 times 2012 earnings, which should come in around $40 per share. Factoring in the company's sizeable cash hoard (around $40 billion or so) we are looking at a cash flow multiple of 12.5x, which is on the high side of what large cap, blue chip companies typically fetch. While the stock isn't expensive, I do not find it terribly attractive as a value name in the technology space.

And that conclusion would be the same even if the company's fundamentals were not coming into question, but they are with the latest earnings miss. It turns out users' shift to mobile platforms is not just hurting


(FB) - Get Report

, but may also explain lower costs-per-click on Google's network. It is also reasonable to worry that many mobile users could start bypassing Google for many search-related tasks, as apps from core service providers can be installed and accessed directly on a smartphone.

And then you have the Motorola acquisition, which unquestionably hurt earnings this quarter. With Motorola hardware losing money, Google's management team has to quickly figure out how to stop the bleeding and at least get the hardware business to breakeven so it does not offset positive cash flow from the company's other businesses (and be a drag on earnings in future periods). I am confident Google will accomplish this over the long term, but we should not be surprised if the next several quarters continue to show losses for the Motorola division. In fact, rumors of a $99 Google tablet in time for the holidays this year would only pressure margins further in the near-term, even though I would think such a product would be a good seller. In this case, a good seller means more red ink for investors, even as customers would likely rejoice.

All in all, I think investors should forget about the earnings leak and instead focus on the fundamentals and the stock's valuation. Neither are overly impressive at the current point in time, which indicates to me that the stock, while down quite a bit, is not nearly cheap enough to warrant bottom-fishing just yet.

Brand holds no positions in the stocks discussed in this article.

Chad Brand is founder and President of Peridot Capital Management and author of the popular investment blog, The Peridot Capitalist. You can read his blog at or follow his posts on twitter at or @peridotcapital.

Chad Brand is founder and President of Peridot Capital Management and author of the popular investment blog, The Peridot Capitalist. You can read his blog at or follow his posts on twitter at or @peridotcapital.