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Buy Google While Sentiment Is 'Very Negative'?

Google co-founder Larry Page took over as the firm’s new chief executive Monday, taking the reins from former CEO Eric Schmidt. What should investors do now?

“What’s important is that there’s a lot of questions that people have about the future of the company,” Jason Helfstein, executive director and senior analyst at Oppenheimer & Co., told CNBC.

“In 2009, Google reduced spending on employees and projects to maintain their margins through the downturn; and last year, they put those expenses back and margins were down,” explained Helfstein. “Investors tend to look at what happened recently and tend to assume that it repeats itself.”

“And the concern is that this will be another investor spending year and with the change in CEO—putting one of the founders who is more of a product person in charge of the company, as opposed to somebody who’s perceived to be a professional manager—that’s going to continue that pattern of margin depression,” he added.

But Helfstein pointed out that while sentiment is “very negative” on Google stock right now, that’s typically when investors should buy into such well-known companies.

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Scorecard—What He Said:

  • Helfstein's Previous Appearance on CNBC (Dec. 3, 2010)

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Google Competes With:

Yahoo

Microsoft

Apple

AOL

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Disclosures:

Oppenheimer & Co. makes a market in the securities of GOOG.

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