ebook essays pieces of the puzzle
Friday, March 4th, 2011
a market stock

It’s hard to believe that since the end of 2007, Google has underperformed a tad, and that from 2008 on has had almost no volatility on a relative basis.  Google, a market stock?

There has been a lot of press of late about the quality of its search results (I threw in my two cents too) and the company faces a host of challenges in making money elsewhere.  While earnings have continued to climb, free cash flow in dollars has rolled over and the yield on that free cash, as shown in the bottom line, is nothing special.  It appears to be neither a true growth stock or a real value stock right now — it’s a market stock.

Of course, that will change, one way or the other.  Something that hasn’t changed is the consensus rating.  It has barely budged and clings to the top of the scale, with over eighty percent of the analysts having buys on the stock and none having a sell.  It will be interesting to see what happens when (if) that changes.  (Chart:  Bloomberg terminal.)