Google Should Continue to Rally In 2014
Technology stocks were market lagers during the first 9-months of the year but the 4th quarter has been a pleasant surprise for technology investors as large cap technology names played catch up football. The shorten holiday season likely helped stock that have a presence online that can assist in the process of finding gifts. Google is poised to see increasing activity this season, and should benefit from a Santa Claus rally
Google has been on a robot buying spree. On Monday the company announced that it had purchased Boston Dynamics which is a company that specializes on animal robots that can climb multiple types of terrain. It is not clear yet what Google plans on doing with their robot division.
Looking forward Google is poised to deliver outstanding financials in 2014 led by gross margins. The gross profit margin is a measurement of a company's manufacturing and distribution efficiency during the production process. A company that boasts a higher gross profit margin than its competitors and industry is more efficient and therefore more profitable based on each unit of product produced. Investors tend to pay more for businesses that have higher efficiency ratings than their competitors, as these businesses should be able to make a decent profit.
In 2013 Google produced gross margin 2013 of $32.753 billion / $57.386 billion = 57.07%. Over the past four years, Google's gross margin has been decreasing. The ratio has decreased from 64.47% in 2010 to 57.07% in 2013, but still well above its competitors.
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