Capitalism is far from perfect. In its purest form, when markets are truly operating unencumbered, lust for greed can result in power running amok.
While there have been huge benefits to the global economy thanks to these behemoths, there are also consequences that could result in more harm than good if they remain unchecked.
The problem can be boiled down to the economic principle of monopoly.
Monopoly power can result in higher prices, greater intrusions on privacy, and - ironically for a technology company - a lack of innovation (see Microsoft in the early part of the New Millennium).
All of these things are now happening at all three of the tech companies mentioned above.
Now, the U.S. Department of Justice is working overtime to keep these companies in check.
Politicians on both sides of the aisle are encouraging action.
The weapon of choice in the fight will be antitrust provisions of the Sherman Act.
According to The New York Times, the Department of Justice is considering filing an antitrust case against Google.
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At issue is how Google places websites in search results. The company essentially controls the entire advertising industry at the expense of smaller players in the space.
To the extent the justice department goes after Google, those smaller players stand to benefit.
It could be a huge catalyst for the breakout stocks we have for you today. Of course, we turned to the Money Morning Stock VQScore™ to find the real winners.
While the FANG stocks will remain big players in the long term, turning to small-cap tech firms could deliver huge gains in the short term.
Here are three breakout stocks that just earned our highest VQScore...
Stocks to Buy Following Google Antitrust News, No. 3
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The companies hurt the most by big tech monopoly power are the specialists. The lack of diversity against the larger foes is a huge competitive disadvantage.
Family care marketplace company Care.com Inc. (NYSE: CRCM) could get a boost in revenue if the monopolists like Google are reined in.
With a market cap of just under $500 million, Care.com is exactly the type of company that will benefit by taking down the large technology companies.
Since early March, shares of Care have lost nearly half their value on concerns about an economic slowdown.
That selling opens the door to buy shares before the antitrust catalyst truly kicks in.
Even before any benefit accruing from antitrust action, analysts expect Care.com to grow profits by 20% in 2019.
You can buy that growth for about 20 times earnings today.
With good times coming as competition is unleashed, now is the time to buy Care.com.
Stocks to Buy Following Google Antitrust News, No. 2
The macro story in the market today is tariffs, but tariffs have nothing to do with the Google antitrust case.
That hasn't mattered to market participants that have taken down stocks in the month of May including 58.com Inc. (NYSE: WUBA).
58 is a China-based Internet company with a number of platforms including human resource listings. That focus on jobs has most certainly negatively impacted by Google, but that could change with effective antitrust enforcement.
With the selling in May, shares of 58 are attractive on a fundamental basis, according to the VQScore system.
Analysts expect 58 to grow profits by 28% from the current year to the next. At current prices, shares trade for only 18 times current year estimated earnings.
A big boost in smaller technology companies triggered by antitrust action will only add fuel to the fire once these stocks start rallying.
Stocks to Buy Following Google Antitrust News, No. 1
Right below the big FAANG stocks sit some pretty interesting competitors ready to pounce when the playing field is leveled.
One of those names is Chinese instant messaging company Momo Inc. (NASDAQ: MOMO).
With a market cap of $6 billion, Momo has the size to better compete with the giants and even more so with antitrust actions that could take down Google and Facebook.
In addition, Momo isn't so big as to take away future growth opportunities for investors in the stock today.
By comparison, another mobile messaging company, Snap Inc. (NYSE: SNAP) has a market cap of $17 billion.
Valuation wise, Momo is attractive today.
Analysts expect Momo to grow profits by 21% from the current year to the next.
At current prices, shares of Momo trade for only 11 times current year estimated earnings.
When the Google antitrust catalyst kicks in, Momo will have even more momentum.
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