Welcome to Week 3 of the Big Idea Portfolio. For the second consecutive week, Riverbed Technology and salesforce.com
|S&P 500 SPDR||$127.71||$131.46||2.94%|
Source: Yahoo! Finance.
*Tracking began at market close on Jan. 6, 2012.
**Adjusted for dividends and other returns of capital.
If this week's results look misleading, it's because deadlines forced me to use Thursday's market close as the benchmark. Had I included the great-than-8% sell-off in Google shares in these results, I'd either be losing slightly or about even with the market. I'd be a very small-f fool indeed to claim an edge at this point.
Google's numbers hurt me most. Analysts looking for $10.51 of non-GAAP earnings were instead treated to $9.50 a share of profit. An 8% decline in the cost per click for Google ads led margins lower, resulting in the shortfall. Yet CEO Larry Page doesn't necessarily see that as a long-term problem. Instead, he's aiming for better aggregate results for advertisers.
"There are lots of product changes that we can make that can increase CPCs or decrease CPCs and kind of have ... an inverse effect on the number of clicks and sort of not change the actual dollars spent, for example," Page said during a conference call with analysts.
Neither Riverbed nor salesforce.com had much in the way of hard news to report over the past week, though salesforce.com ranked 27th on Fortune magazine's annual list of the 100 best companies to work for, up 25 spots from last year. Google ranked first, while Rackspace Hosting ranked 74th.
The week that was
Despite a strong week in the S&P 500, trading volume remains muted as investors ponder the consequences on ongoing talks about restructuring Greek debt. Default remains a looming threat, even if it hasn't done much to halt a banking recovery here in the United States.
Shares of Bank of America
Although we can't know exactly what's to come in 2012, tech investors were treated to a smorgasbord of good earnings results. IBM grew sales 1.6% in the fourth quarter while adjusted profits expanded more than 11% and beat estimates by $0.09 a share. Big Blue also forecast 2012 earnings that exceeded Wall Street's forecasts.
There's your checkup. See you back here next weekend for more tech-stock talk. In the meantime, you can check out the Fool's latest special report -- "3 Stocks That Will Help You Retire Rich" -- and add the Big Idea portfolio stocks to your Foolish watchlist for ongoing, up-to-the-minute coverage. Both the report and the watchlist as 100% free to use:
Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He owned shares of Apple, Google, IBM, Rackspace Hosting, Riverbed Technology, and salesforce.com at the time of publication. Check out Tim's Web home, portfolio holdings, and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.
The Motley Fool owns shares of Bank of America, Apple, Google, Intel, IBM, and Microsoft. Motley Fool newsletter services have recommended buying shares of Google, Rackspace Hosting, Intel, Apple, Microsoft, Riverbed Technology, and salesforce.com, creating a bull call spread position in Microsoft, and shorting salesforce.com. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.