As with people, the most dangerous time in a successful company's life happens during its adolescence. As a business matures, its growth naturally slows, it finds itself throwing off more cash than it can prudently deploy, and it arrives at a natural crossroads.
At this crossroads, a company's future depends a lot on how it answers this question: "Should I acknowledge my maturing status gracefully and begin to act like a large company, or should I try to hang on to my youthful vigor through aggressive tactics like plastic surgery and botox?" If a company makes the wrong choice, it can start on the slippery slope toward becoming the next Krispy Kreme Doughnuts
Fortunately for investors, software titan Microsoft
Contrast Microsoft's successful entry into adulthood with the veritable tantrum thrown by fellow tech titan Cisco Systems
The 'tween years
Of course, growing up is often tumultuous. The aggressive funds like Franklin Aggressive Growth
Adding to the pressure on its shares is the expected intensifying competition from the likes of search pioneer Google
Such worries helped keep Microsoft's shares low. That made it a prime target for Motley Fool Inside Value's Philip Durell, who picked it back in October, back near its recent lows. No longer wanted by growth funds, still eschewed by income funds, and facing another round of as-of-yet unbeaten competition, Microsoft's shares were just too inexpensive to ignore. Already a market-beating pick for the service, it shows just how much an investor can accomplish by finding strong companies trading on the cheap.
Defense wins ball games
If anything, Microsoft is a master of coming from behind, protecting its turf, and applying ideas appropriated elsewhere. Back in the day when Apple
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