The level of cash within the Core Equity composite is a direct function of valuation. As companies within the portfolio approach or exceed our current estimate of fair value, we reduce or eliminate the position. Ideally, there are existing opportunities within the current portfolio to recycle that capital or add new capital to existing positions. … Read more
Your view of value has to be based on a solid factual and analytical foundation, and it has to be held firmly. Only then will you know when to buy or sell. Only a strong sense of value will give you the discipline needed to take profits on a highly appreciated asset that everyone thinks … Read more
Microsoft announced yesterday that it will buy Nokia’s mobile phone business and license its patents for €5.4bn in an all-cash deal. This announcement marks another long shot by outgoing (thankfully) Steve Ballmer, Microsoft’s chief executive, that Microsoft’s mobile strategy can match Apple and Samsung Electronics. The Nokia announcement comes only a week after the news … Read more
Microsoft recently announced a change to the Microsoft Office pricing model. Consumers will be encouraged to purchase a subscription-based version of their latest Office iteration, Office 365. Microsoft originally introduced Office 365 to businesses back in June 2011, but they have recently decided it is time to switch consumers (largely home users) over to this … Read more
We wonder if the market is being overly anxious about the release of Windows 8, Microsoft’s new operating system. The question obviously comes to mind after news of Steven Sinofsky’s sudden and completely unexpected resignation last Tuesday (Steven Sinofsky was the executive behind Windows 8). As long-term investors, we do not worry about this sort … Read more
Despite the increasing popularity of tablet computers, such as Apple’s iPad, Microsoft’s Windows operating system revenue is not about to decrease anytime soon. In fact, Windows 7 is the fastest selling version of Windows in history. Additionally, we would not be surprised if Microsoft generates over $23 billion in free cash flow for fiscal 2011, … Read more
Microsoft has confirmed that it is acquiring Skype, the internet telephone company, for $8.5 billion in one of the company’s largest deals. Just about the kindest thing that we can say about this acquisition is that Microsoft is using overseas cash to complete the transaction — meaning, if this $8.5 billion in cash was repatriated … Read more
Last week, on September 22, Microsoft raised its dividend by 23% to $0.16 per share per quarter, implying a yield of 2.5%. This increased the stock’s yield into territory that is meaningfully north of the market average of 2.0% for the S&P 500. The stock actually dropped on this news. This new dividend rate still … Read more
Two weeks ago, Apple surpassed Microsoft in stock-market capitalization to become the second-most valuable publicly traded U.S. company, trailing only ExxonMobil. Apple is by far the more popular stock. Year-to-date through June 4th, Microsoft is down 14.5% while Apple is up 21.5%. Over the past five year, Microsoft is up 1.5% while Apple is up … Read more
Microsoft reported quarterly earnings last week and as expected, Windows 7, the company”s new operating system, produced strong results. Total revenue increased by 6.3% to $14.5 billion. Microsoft’s Windows business reflected the strength of the personal computer market as revenues grew 28% year-over-year to $4.4 billion. However, Microsoft reported soft results for its other businesses. … Read more