Microsoft Corp (MSFT)

Fairly non-cyclical. You will always get good pockets of growth. But this one is stagnant. Nokia was not a good idea. He is concerned with the 10s of thousands of employees they just picked up. They are challenged and it is well known they are. Sees a low level of growth. 3% dividend. Be prepared to hold it for 3 years after the new CEO turns things around.

Had a succession of problems and a stiff breeze in their face. They failed on a variety of new innovations, such as tablet, phone, PCs. Not a growth area.

(A Top Pick August 23/12. Up 6.38%.) Has pared some off his holdings. Businesses are going to have to go through a cycle upgrade whether they like it or not so he is still holding. Great dividend. He can see $40 in the next 12-18 months.

Likes stocks that are trading at less than 15X earnings, 10X pre-tax earnings and close to 10% free cash flow with beautiful balance sheets. This has all of these factors with a wonderful installed base. A lot of risk. Hasn’t made it with the devices, there are worries about some of the software but, at the end of the day, it is spinning off a ton of cash. Earnings are growing every single year. Thinks they have a smart activist investor who is pushing for changes.

Thinks this one is dead money forever. They have no presence in smart phones or in tablets. They have a product, but it doesn’t sell. The desktop is disappearing. This is going to show up in their financials eventually. Coming out with things like Xbox which will which will give them a temporary boost in earnings in that division. He wouldn’t ever own this one. Thinks they should buy BlackBerry (BB-T) and that they will. It would give them an established presence with a proven brand.

Sold some a couple of weeks ago. Windows 8 was a disappointment and they are doing a bit of a shuffle. Great long term hold.

Has done fairly well over the last little while and he is not quite sure why. New products and upgrades have not done well but there seems to be renewed interest in this stock. There are many others in this space that are trading at as attractive a valuation but have much, much more visibility and solid fundamental growth prospects.

On the surface, this looks pretty good. Dividend is safe and solid and probably will grow. Becoming more and more like a utility, and part of that is that they have tremendous products but not a lot in the way of innovative new products. He prefers others such as Apple (AAPL-Q) and Google (GOOG-Q).

(Top Pick Jun 28/12, Up 18.07%) Really likes it because he thinks businesses and enterprises have missed so many upgrades. Windows is transformational for them. Used to be 40 times earnings but now he thinks it has room to grow. 9 times earnings now. Thinks there will be a significant upgrade in businesses.

There is some upside and his target is fairly aggressive. He would be a buyer much lower. A resilient business. Still positive catalysts.

There is more room, but it is up 31% year to date. They continue to build out the portfolio. It is not just about windows any more. Thinks they can regain their footing, but with the run he would wait for it to pull back to the $31 range.

(A Top Pick May 18/12. Up 23.9%.) Thinks this is now at the top of its range even though the model price is at $51.13. He still owns a little. 2.6% yield. From a 5 to 8 year period, you are going to make compound growth at probably high to double digit on any name.

(Market call minute.) Likes this. Thinks people are underestimating the value of this company. Great products.

Tech has underperformed this year. But in the last few weeks it has shown improvement. Strong balance sheet and willingness to return capital. 2.8% dividend. 11 times earnings. 30% payout. It is being bought for the dividend.

If you go back 10 or 12 years you have seen profits triple but multiple has dropped 2/3rds because it is not seen as a growth story.