Opinions
David Burrows
Microsoft Corp
MSFT-Q
TOP PICK
Jan 31, 2018
Stock price when the opinion was issued
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Premium contentLikes the stickiness to both personal and corporate clients -- once you get into the network, it's very hard to get out. Cloud business has improved significantly. If quantum computing ever comes to the forefront, MSFT is there.
ROIC is 23% vs. WACC of 9%. This gives them lots of cashflow to pour money into the next greatest thing. R&D development is important, given how fast things are changing these days. Yield is 0.72%.
Excellent company that meets his criteria. If you made him choose one or the other today, he'd have to say META based on valuation (with the assumption that the investor would hold a position for the long run). MSFT trading ~37-38x PE, whereas META is in the mid-high 20s.
One of his top-performing stocks. He targets $514. Very well-run company. Boasts solid moats in enterprise software and operating systems, which ensures recurring revenue and customer retention. Azure Cloud remains second only to AWS. The valuation may be elevated, but MSFT is good now for selling some calls given volatility. Keep the calls pretty sure, writing calls around $490-495.
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This peaked out at $54 in 1999. It finally broke out from the high in 2016. In 1999 they earned $.70 a share, and in this past year they earned $3.43 a share. This company is rejuvenated through its Cloud-based business. They reported great earnings tonight. Their Cloud business grew 98% after growing 90% last quarter. Their gross margin widened again, becoming more profitable. Their earnings were up 15%. They are growing their dividend at greater than 15% a year, and that should continue for quite some time. Subscription software sales were up 40% year-over-year. Dividend yield of 1.8%. (Analysts' price target is $98.67.)