Google (NASDAQ:GOOG) contributed to the portfolio’s relative outperformance, after the stock appreciated 30% during the Quarter. We believe this was a relief rally, as much as it was the stock catching up to the Company’s torrid growth from the past few years. Much of the relief had to do with Google’s strategy for newly acquired Motorola Mobility. While the Company has been light on specifics, rumors emerged that Google would sell the commodity feature-phone and set-top box units of Motorola by year-end, in order to focus exclusively on Android smartphones. We think a more focused Motorola is a good strategy that could drive increased adoption of Android-based smartphones, which ultimately drives Google’s rapidly growing mobile advertising business. As the stock’s forward price to earnings multiple expanded back to double-digits, we trimmed positions. The Company’s competitive edge is still very robust and we continue to think the stock is cheap, especially relative to its potential growth rate.
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