A growth case for Microsoft

This story will review Microsoft. I will analyze why it could be a much better year for Microsoft shareholders. This firm Piotroski F Score is 4 - Ordinary. Given the investment horizon of 30 days, Microsoft is expected to generate 1.5 times more return on investment than the market. However, the company is 1.5 times more volatile than its market benchmark. It trades about 0.31 of its potential returns per unit of risk. The market is currently generating roughly 0.24 per unit of risk. We found thirty-eight available fundamentals for Microsoft which can be compared to its peers in the industry. To make sure the equity is not overpriced, please verify all Microsoft Corporation fundamentals including its Cash per Share, Beta and the relationship between Revenue and Cash Flow from Operations . Given that Microsoft has Price to Earning of 27.81X, we recommend you check Microsoft last-minute market performance to make sure the company can sustain itself down the road. Use Microsoft to protect your portfolios against small markets fluctuations. The stock experiences moderate downward daily trend and can be a good diversifier. Check odds of Microsoft to be traded at $116.89 in 30 days.
Published over a year ago
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Reviewed by Ellen Johnson

MICROSOFT CP currently holds roughly 127.67B in cash with 27.78B of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 16.64. Microsoft dividends can provide a clue to current valuation of the stock. The firm one year expected dividend income is about $0.82 per share. About 75.0% of the company shares are owned by institutional investors. The company has Price/Earnings To Growth (PEG) ratio of 1.92. Microsoft last dividend was issued on 2019-05-15. The entity had 2:1 split on 2003-02-18.
Investing in Microsoft, just like investing in any other equity instrument, is characterized by a strong risk-return correlation. High risks mean high returns and low risk means lower expected returns. Risk management is the act of identifying and assessing the potential risk and developing strategies to minimize these risks and earn maximum possible profits while holding Microsoft along with other instruments in the same portfolio. Using conventional technical analysis and fundamental analysis to select individual securities into a portfolio complements risk management and adds value to overall investors' investing strategies.
Sophisticated investors, who have witnessed many market ups and downs, anticipate that the market will even out over time. This tendency of Microsoft's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Microsoft. Your research has to be compared to or analyzed against Microsoft's peers to derive any actionable benefits. When done correctly, Microsoft's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in Microsoft.

How important is Microsoft's Liquidity

Microsoft financial leverage refers to using borrowed capital as a funding source to finance Microsoft ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Microsoft financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Microsoft's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Microsoft's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Microsoft's total debt and its cash.

Microsoft Gross Profit

Microsoft Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Microsoft previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Microsoft Gross Profit growth over the last 10 years. Please check Microsoft's gross profit and other fundamental indicators for more details.

Microsoft Correlation with Peers

Investors in Microsoft can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Microsoft. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Microsoft and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Microsoft is related in some way. The cells in the table are color-coded to highlight significantly positive and negative relationships. Each cell shows the correlation between one pair of equities and can be used to run pair trading strategies or create efficient portfolios with your current brokerage. Please check volatility of Microsoft for more details

What is driving Microsoft Investor Appetite?

The latest bullish price patterns experienced by current Microsoft Corporation shareholders may encourage investors to take a closer look at the firm as it closed today at a share price of 118.58 on 16389536.000 in trading volume. The company executives have been very successful with rebalancing the firm components at opportune times to take advantage of market volatility in March. The stock standard deviation of daily returns for 30 days (very short) investing horizon is currently 0.9346. The very small Stock volatility is a good signal to investors with longer term investment horizons. Microsoft is trading at 119.28. This is 0.54 percent decrease. Today highest was 119.54. Microsoft Effect of Exchange Rate Changes on Cash is decreasing over the last 4 years. Further, Microsoft Asset Turnover is increasing over the last 4 years. The late value of Microsoft Asset Turnover is 0.76.
Consolidated IncomeDirect Expenses
 2018 0.00  0.00 
 2019 (projected) 0.00  0.00 
All in all, we belive that Microsoft is currently undervalued with low chance of bankruptcy in the next two years. Our final 'Buy/Hold/Sell' recommendation on the firm is Strong Buy.

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Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Vlad Skutelnik do not own shares of Microsoft. Please refer to our Terms of Use for any information regarding our disclosure principles.

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