Growth vs. Value: Is Microsoft Stealing Google’s Investors?http://www.fool.com/investing/general/2014/03/27/is-microsoft-stealing-googles-investors.aspx Ashraf Eassa
March 27, 2014
Microsoft (NASDAQ: MSFT) had long been blasted as being a stale technology company that "missed mobile" and couldn't innovate. While long-suffering shareholders for the past 10 years dealt with a frustratingly range-bound stock in owning Microsoft, shareholders of names like Apple and Google (NASDAQ: GOOG) have been very richly rewarded over that timeframe. However, something interesting has been happening in the markets over the past few weeks -- is Microsoft getting Google's money, or is something bigger going on?
What's been happening?
The following chart is split into two columns. On the left, we have the one-month returns of a number of household "value" technology stocks (all with price-to-earnings ratios under 15), and on the right, we have the 1-month returns of a number of household "growth" names. The trend is, for lack of a better word, interesting:
Notice a trend? The high-growth names that have done so well over the past year are starting to pretty severely underperform. What's going on here? Why is growth suddenly out of vogue and why is value now in?
Could it be buyer exhaustion?
Could this be a case of buyer exhaustion? No matter how many companies Facebook manages to buy with its stock, there's still no escaping the