Dan Niles On CNBC: Likes Google, But Not The Stock (GOOG)

Dan Niles, Co-CIO at hedge fund Alpha One Capital Partners, did a phone interview on CNBC this morning in order to talk about his outlook for Google (NASDAQ: GOOG). He said that he likes the company, but not the stock.

Referencing its core search business, Niles said that Google (GOOG) is a more algorithmic focused company with little exposure to the fast growing social networking space. He said that Google's employees probably have the highest IQ in tech land, but that it is not helping the company grow.

He compared Google to Microsoft (NASDAQ: MSFT) and said that the company may have a similar future. Microsoft produces great cash flows, but the stock has been a significant under-performer. Microsoft's (MSFT) earnings multiple has compressed considerably over the years because investors do not believe the company can deliver growth.

Currently, GOOG shares trade at a forward earnings multiple of around 15.45 versus a forward multiple for MSFT of just 9.68. If GOOG's multiple were to contract to a similar level as MSFT, it would mean a much lower future share price.

Benzinga had the pleasure of interviewing Dan Niles not too long ago. He talked about his prediction for a double dip recession as well as his bearishness with regard to the semiconductor industry. Thus far, many of Niles' predictions are beginning to come to fruition. The interview is highly recommended. You can check it out here.