MoneyHeavy
Portfolio
Microsoft
Microsoft <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MSFT)") else Response.Write("(Nasdaq: MSFT)") end if %>, $125 7/8
Yep, I'm including Microsoft in this second portfolio as well. Since we opened
our digital doors, it's been my position that Microsoft is one of the strongest
businesses in the history of man. No great genius on that call. Where I part
company with many, though, is that I believe Microsoft is also one of the
most dramatically undervalued large-capitalization companies.
With $10 billion in cash, no meaningful debt, with profit margins that run
well above 25%, and with a young management team -- Microsoft has the markings
of a rapidly growing "small" company. With the Internet lying before them,
Microsoft has the task of creatively and neatly integrating the entire thing
into its operating system. They are the spider to the World Wide Web.
True, the stock is trading at what seems an unthinkable multiple. True, MSFT
could fall by, heck, 40% over the next eighteen months. And yes, they probably
will either have to buy out the Justice Department or split out components
of their business. But when you consider that the demands for software will
shoot through the roof over the next ten years, when you consider how perfectly
positioned Microsoft is, when you think on their policy of hiring smart,
young people, and when you remember that they have $10 billion in cash supporting
their moves today... well, I won't try to convince you. It just sits number
one on my list. (Next page.) |