"I think we're in for a stellar year for Microsoft (NASDAQ: MSFT)," says Wayne Mulligan in The Tycoon Report. Here, he explains why it's time to "back up the truck."
"Microsoft is a company that holds the top spot in almost every single market it plays in, has had a track record going back over two decades for stellar business and financial performance, and yet its stock has languished for the last five years.
"Microsoft Windows and Office have a 90% market share in their respective markets. The company is on track to do over $50 billion in sales this year. MSFT maintains a 30% profit margin (approximately) and a 40% return on equity.
"With Windows on 90% of the world's computers, it's fairly easy for Microsoft to push new products out the door at very little cost . . . that's huge, and is what contributes to its healthy revenues and bottom lines.
"The average American company earns roughly 15% profit margins -- Microsoft maintains double that number. And a 40% return on equity means that for every dollar Microsoft puts into its business, it's able to pull 40 cents out. Again, the average American company is closer to 16%.
The advisor explains, "But these are just numbers, and as we all know, Microsoft may be a great company, but it still may not be a great time to buy the stock. So to answer the final question, Is Microsoft a buy now? -- all I have to say is: Heck, yeah!"
"The stock had been trading in a tight range for over five years. It's just sat between $29 and $31 per share for as long as I can remember. But with the release of Windows Vista, the company has finally broken out.
When you combine that with the company's move into online advertising and recent acquisitions of companies like aQuantive, I think we're in for a stellar year for Microsoft.
"As one of my old clients used to say, 'Wayne, I think we're gonna need to back the truck up into this one.' And those are my sentiments exactly. Microsoft will be a great long-term hold, and I think it'll show us some fantastic short-term profits, as well."
Each day, Steven Halpern's TheStockAdvisors.com website features the latest investment commentary and favorite stock picks of the nation's leading financial newsletter advisors.
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Reader Comments (Page 1 of 1)
11-19-2007 @ 4:42PM
Gumby said...
Gentlemen, start your bulldozers and steamrollers, eh?