Microsoft Corp (MSFT)

A great business positioned well in OS and the Cloud for enterprises--which is a strong secular tailwind. They are still gaining business as they move to a subscription-based system. MSFT generates a lot of free cash flow that will increase dividends over time. They hold a lot of cash that they will repatriate from overseas. A good business, and, yes, a little expensive, so he would add to a position to some degree, though not huge.

The company reached a big target at 10 times book value near $120. The problem is that its intrinsic value, based on earnings growth, is about 30% lower than the current stock price. It the market has a pullback, this could pull back to at least $93.

Software tends to be more stable and he likes the business model. He worries he may regret this one if the market pulls back, but likes their earnings growth potential. Yield 1.7%. (Analysts’ price target is $124.32)

Definitely on her radar. Today, it pulled back to $106 which is getting pretty close to her pulling the trigger. Before, it was too expensive. Been doing very well this year. Nice recurring revenue stream and their businesses are doing well. Their cloud business is growing. Gaming doing well.

The run will continue. Their story is cloud transition, moving client workloads on-premise (in their buildings) onto the cloud. MSFT's data centre capacity rivals Amazon's AWS, the market leaders. MSFT is catching up with advantages being brand loyalty--customers trust them for dependability. Lots of runway left; he has a target of $145 (1.6% dividend, Analysts' price target:$124.32)

They have 150 million users so he sees this as a safe place to be. They are building on the cloud technology.

He was long on it for quite a while. It has been a great trade, but it has caught up to the NASDAQ strength and it has got too expensive for him even if not so relative to other tech stocks. It has great return on equity. It has a decent quarter and the balance sheet is pristine. A better yield would be helpful but it is too expensive right now for him.

In the software space this company with 150 million users is a safe place to be at this stage of the market cycle. This provides on-going revenue and they are a leader in Cloud developments. Yield 1.5%. (Analysts’ price target is $122.30)

(Past Top Pick, November 16, 2017, Up 30%) It slowly grew as it increased its earnings. The market once considered this yesterday's tech company. This will likely outgrow Amazon Web Services. It's starting to get expensive, but this half-trillion company is actually accelerating growth.

This stock was dead money for years but has taken off. As a cloud business, they have become a growth company again, with double-digit revenue growth and consistently strong margins. This is the most expensive stock in his portfolio from a price to earnings basis but he believes that industry is still in early stages of jumping onto the cloud and that there is very strong growth ahead for Microsoft. He expects double-digit earnings growth for years to come and with $50 billion of net cash, he sees this as the best company that he owns. Yield 1.5%

The investment thesis on Microsoft is very good. They converted from software to cloud computing and have done a fabulous job of this. In future, they can grow dividends and stock buybacks. Balance sheet is fabulous. Not a lot of reasons why you would not buy it.

They are modeling they can grow 15% 2018-2020 compounded annually. Trades at 20 times. A little expensive but the growth is there. He thinks it has legs long term.