Alphabet has "the most hidden value of all the mega-caps," MKM Partners' Rob Sanderson writes in a new note to investors.

MKM reiterated its buy rating on Alphabet shares, in part because of the company could be poised for a large capital returns program. Recently passed tax reform could free up some of Alphabet's $61 billion of off-shore cash (the highest amount of off-shore cash of all the major internet companies, according to Sanderson).

He also points to the "remarkable" growth of Google's "Websites" revenue, which has continued to grow 20 percent or more over the last two years.

Google splits its revenue into "websites revenue," which comes from Google-owned sites like YouTube, and "networks revenue" which comes from third-party sites that use Google ad products like Double-click and AdSense. Although Websites is already an $80 billion advertising business, MKM expects revenue to continue to grow at a "very high rate" thanks to increasing mobile search and YouTube growth.

"We think GOOGL has the most unrecognized value of the mega-caps and that additional disclosure could lead to revaluation," Sanderson writes. "We also think that capital reallocation ($107Bn in cash) could be a catalyst for value creation."

Alphabet, which has a market cap of nearly $820 billion according to FactSet data, reports its Q4 earnings on Thursday, February 1.