Microsoft Corp (MSFT)

(Top Pick Apr 17/12, Up 4.27%) Still likes it. A cheap company with good dividend. People think of it as a retail company but they are an enterprise company. Thinks it has a lot of upside.

Transitioning from a growth story into a slow, steady, moderate growth story so you will get a transition of shareholders. Really hasn’t done much since 2000. It has introduced a dividend and has tons and tons of cash. If they can get a real strong foothold in the broader home office through PlayStation and the home networking market could be a big win. The monopoly on the desktop is working but where do they go from here. Going to be dead money for quite a few years.

The PC overhang is a bit more than you want to be exposed to at this point. 60% of business attributed to PCs. They are doing a good job on the server side of the business however.

Suspects they will miss. Expects they will pull back. Not a huge downside risk but some correction risk and he would want to see what happens before going in. Not a huge growth story.

(A Top Pick March 21/12. Down 7.85%.) Their business is doing very well. Thinks that Pro will do very, very well. Have a lot of great products. Just takes a little bit of time. Great dividend and great balance sheet. Feels the stock is worth $35-$40 and you’re getting paid to hold the stock.

(A Top Pick March 6/12. Down 9.13%.) Was stopped out at $31.25.

(Top Pick Feb 15/12, Down 4.51%) Certainly they have lots of products. It’s an enterprise company and Windows 8 is driven by what happens in enterprise. The second half of this year you will see greater gains. The Surface is a great product. It is a working tool. Have lots of cash and made a lot of good acquisitions. Nice dividend and it is not expensive. Lots of downside protection.

Unloved and yet a great earnings growing company. Has grown its earnings by 44% since 2007. Very low valuation. 7X PE ex-cash is outrageously low.

Historically stocks like this don’t do very well at this time of year. As you get into the month of March, most of the technology stocks tend to come under some pressure. Preferred strategy is to take advantage of any kind of strength you might see in the next short period of time.

(Top Pick Mar 6/12, Down 9.23%)

Has not been a great stock for the last little while. Great cash flow yield of about 11%, but is not paying that out by dividend. Just can’t seem to get their act together in the mobile space. Under pressure as PCs have less and less share.

Has not been a good performer. Started buying in 2011 and has not done anything for clients except the dividend. So far seems to be people focusing on rumors or bad news. Windows 8 has not come out of the park. But he expects another year of record earnings and another dividend increase. Hold on and maybe buy more. The multiple is still too low.

For anyone running a value screen, it is at the top of the list. Phenomenal crash flow generation. Phenomenal cash holdings. Has some of the highest margins in the technology sector but the gross margin has been coming down. Have been able to offset it with some expense side but the question is still, how do you replace those revenues going forward.

Facing a big uphill battle. On the mobile front Google (GOOG-Q) and Apple (AAPL-Q) are winning. Their tablet has been a little bit of a flop so far. Windows 8 operating system has been a little bit slower than people had hoped. Very little financial risk. Have a great balance sheet and lots of cash and you will pick up a nice dividend but it is a laggard stock.

Technology sector in general tends to move between December and February so we are right in the midst of that. Chart looks like it has formed a bit of a triangle with descending highs but a flat base. Probably not a bad position but his discipline would be to Buy on a breakout.