Today I will review Microsoft. I will break down why Microsoft leadership may should not consider a stake in the firm. This firm current daily volatility is 0.99 percent, with beta of 1.29 and alpha of 0.07 over S&P 500. Macroaxis considers Microsoft very steady given 1 month investment horizon.
Microsoft has Sharpe Ratio of 0.3012 which conveys that the firm had 0.3012% of return per unit of risk over the last 1 month. Our philosophy towards estimating volatility of a stock is to use all available market data together with stock specific
technical indicators that cannot be diversified away. We have found twenty-eight
technical indicators for Microsoft which you can use to evaluate future volatility of the firm. Please exercise Microsoft Corporation
Mean Deviation of 0.9423,
Risk Adjusted Performance of 0.1461 and
Downside Deviation of 1.18 to check out if our risk estimates are consistent with your expectations.
The company currently holds 85.48B in liabilities with Debt to Equity (D/E) ratio of 92.7 indicating the stock may have difficulties to generate enough cash to satisfy its financial obligations. 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. Lets now take a look at Microsoft Shares Owned by Insiders. Based on latest financial disclosure 1.41% of Microsoft Corporation are shares owned by insiders. This is 85.37% lower than that of the Technology sector, and significantly higher than that of
Software - Infrastructure industry, The Shares Owned by Insiders for all stocks is 79.59% higher than Microsoft.
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.
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
118.38 on
15065389 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 0.9915. The very small Stock volatility is a good signal to investors with longer term investment horizons. Microsoft reports 74.60% shares owned by institutions. Microsoft is selling for under 119.31. That is 0.66 percent decrease. Today highest was 120.23. Microsoft Return on Sales is comparatively stable at the moment. Further, Microsoft Cash and Equivalents USD is comparatively stable at the moment.
| 2015 | 2016 | 2017 | 2018 | 2019 (projected) |
Microsoft Long Term Debt to Equity | 0.57 | 1.05 | 0.87 | 0.79 | 0.57 | Microsoft Interest Coverage | 59.36 | 26.74 | 67.55 | 77.68 | 238.36 |
To summarize, our ongoing 'Buy/Hold/Sell' recommendation on the firm is
Strong Buy. We believe Microsoft is
undervalued with
low odds of distress for the next two years.
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Try AI Portfolio ArchitectRifka Kats is a Member of Macroaxis Editorial Board. Rifka writes about retail product and service companies from the perspective of a regular consumer and sophisticated investor at the same time. She is passionate about corporate ethics and equality in the workforce.
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