Jan. 3, 2017 5:13 p.m. ET

Alphabet, the company that owns Google, raked in $89 billion in revenue last year, analysts estimate, but there’s reason to believe that it could be making a lot more. Google is deliberately building its business slowly, bypassing revenue it could be making so it can draw in more users, says Bill Nygren, an investor from Chicago who runs the successful Oakmark fund. The comments came in an interview published in the latest issue of Barron’s. Nygren’s fund was up 18.7% in 2016.

For instance, Google could be making more money off of YouTube.com if it charged for service or loaded it up with ads like a cable company might. But “rather than trying to monetize its viewership to its fullest extent right now, Alphabet is allowing it to grow.” YouTube could be worth as much as $300 a share, but right now investors are “paying almost nothing for it.” Barron’s estimated last year that YouTube is worth twice as much as Netflix.

Nygren thinks Alphabet shares could rise 50%. On Tuesday, they were trading at $808.

Alphabet also has divisions working on more speculative “moonshot” projects like driverless cars and artificial intelligence that may or may not pan out. Those projects look like “losses” on Alphabet’s financial statements because they cost the company money without immediate returns, but they could result in large financial gains in the future.

And Alphabet has $130 billion in cash on its balance sheet, a massive sum that investors are not fully taking into account.

Investors who aren’t looking at those details might think that Alphabet’s stock is expensive. But if people correctly account for all that cash and give the company more credit for its YouTube potential and the moonshots, then Alphabet is trading at an even cheaper multiple than the overall market. That makes it a value stock and worth buying.

Read the full interview here at Barrons.com.

Big Picture: Alphabet is worth more than the market thinks, in part because it’s been slow to monetize YouTube.