The Tune Hasn't Changed

 | Apr 29, 2014 | 11:42 AM EDT  | Comments
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Stock quotes in this article:

bwld

,

mcd

,

wday

,

feye

,

ibm

,

orcl

,

msft

,

goog

,

FB

,

amzn

Nope. The trade is still on. The trade out of growth into value.

We can monitor the trade by looking at a couple of staid names vs. a couple of high-enterprise-value-to-sales companies (please see yesterday's opus for the parameters!).

Yes, there is plenty of hoopla involving Buffalo Wild Wings (BWLD) and it was a remarkable quarter filled with raw-cost declines, top-line expansion with excellent plus 6% same-store sales and bountiful gross margins, even as liquor seemed to decline as a percentage of the sales line.

But the slow and unsteady continue to win the race as the rally in McDonald's (MCD) following a no-growth quarter is even more breathtaking to those of us used to rewarding the good and punishing the bad.

The growth tech stocks are trying to catch a bid. You have Workday (WDAY) breaking the spell momentarily and that's been a leader on the way down. Perhaps its stabilization is a harbinger that they CAN BOUNCE. Even FireEye's (FEYE) not falling apart on schedule.

Remember, I focus on those because they are the most expensive on an enterprise-to-sales basis of any of the companies I follow.

Yet you have IBM (IBM) putting through a 16% dividend boost and that's captured the attention of many. Don't forget, this stock stopped going down when Warren Buffett was interviewed by Becky Quick on CNBC and threw cold water on the notion that he has soured on management. The dividend boost is clearly welcome news to value folks. So is the incredible push on cloud business, even as it might be detrimental to margins. Remember, if it is really detrimental long term, there is no need to raise the dividend. Keep in mind that Oracle (ORCL), Microsoft (MSFT) and IBM, three old dogs, are learning new tricks of the cloud and that, in itself, is a great threat to what was thought to be the established player.

Somehow, miracle of miracles, we are seeing Google (GOOG) and Facebook (FB) actually higher. They were both down in pre-market trading. I can't stress how important I thought the reprieve Tim Collins sees in the Facebook chart was vs. all of the other high fliers that he said could be sailing off to oblivion. Facebook and Google have been horrendous performers post earnings, even as Google's earnings were pretty darn bountiful -- say vs. Amazon (AMZN) -- and Facebook was just plain fantastic.

My friend and colleague Matt Horween has cited a disgust with what can be called the adventurism of the new tech giants. You throw around $19 billion buying WhatsApp – Facebook -- and a couple of billion buying Nest – Google -- and you begin to get to some real money-chasing dreamcatchers.

It's an influx day and, like every day, a test of the new techs -- or at least a respite from going down -- while value remains in ascendance.

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