MSFT

Amazon: Ranking "The Magnificent 7" (Midyear Update)

As you can see in the table below, “The Magnificent 7” mega-cap stocks have posted incredible 10-year returns. However, there have recently been some big changes in the market (e.g. interest rate expectations) and to these seven businesses in particular (e.g. maturation, dividends, AI and more). In this report, we provide an update to our January rankings of the Magnificent 7 stocks, with a special focus on Amazon (AMZN) (including its business, four big growth drivers, valuation and risks). We conclude with our strong opinion on investing in Amazon (and each of the Magnificent 7) for the remainder of this year (and beyond).

Microsoft Earnings: Temporary or Permanent Slowdown?

Microsoft announced earnings Tuesday after the close, and the shares are reacting negatively. The company beat earnings expectations and topped revenue estimates, but provided weak guidance. Is this a sign of bigger fundamental problems for Microsoft or just a temporary blip on the long-term radar?

If I Could Own Just One Stock

As a long-term investor, I believe in owning a prudently-diversified portfolio of many stocks. However, if I could own just one stock, I’d want it to be a leader in the important categories of revenue growth, dividend income and financial strength (including profitability, a strong balance sheet and an attractive valuation). Following its new quarterly earnings release this week, this report reviews Microsoft’s business, its strengths (in the categories listed above), the risk factors it currently faces and then concludes with my strong opinion on whether Microsoft would be “the one.”

Microsoft: New Options Trade, Another High Income Bullish Put Spread

The tech sell off is continuing this week, and cloud stocks continue to be among the very hardest hit. Microsoft has been rapidly growing its cloud business on a massive scale, and the shares have sold off considerably harder than the rest of the market in recent weeks. And this morning’s small news (Microsoft is paying $7.5 billion cash for game developer, Bethesda Softworks) has created more jitter among investors—perfect for this trade because to prevent Microsoft shares from eventually going higher in the long-term has about a snowflake’s chance in Gahenna. In report, we revisit the high-income-generating opportunity that current exists in bullish vertical put spreads on Microsoft (not as scary as it sounds). Our previous implementation of this strategy expired (quite successfully) on Friday, and the opportunity is again very attractive.

New Options Trade: Very High Upfront Income, Bullish Vertical Put Spread (The Cloud-Tech Sell-Off Continues)

Cloud and technology stocks are selling off hard again this morning, and a lot of investors are fearing there is a lot more selling to come. After all, it is cloud and tech stocks that have rallied so hard this year as their natural “social distancing” qualities have made them the beneficiaries of the dramatic pandemic rebound that has been going on for months.

However, the sell off has been indiscriminate (among cloud and tech), and some very attractive businesses are getting closer to trading at very attractive prices. In this report, we review an attractive cloud-tech juggernaut, and share an attractive options trade that utilizes a “bullish vertical put spread” (not as scary as it sounds). The trade lets you generate attractive upfront income, giving you the chance to pick up shares of this attractive business at an even lower price, while also limiting your downside risk (and limiting the amount of cash you need to set aside to secure the trade as compared to simply selling a naked put option). We believe this is a very attractive trade to place today, and potentially over the next few trading sessions.

Microsoft: Growth, Cash Flow and Perhaps TikTok

Microsoft (MSFT) has experienced an impressive turnaround over the last few years. The company’s top-line growth has been fueled by its cloud computing solutions. Demand for cloud computing has been on the rise and has seen acceleration post COVID-19 due to a global push for business digitalization. More recently, Microsoft has been in the news after announcing that it (along with Walmart (WMT)) is in talks with ByteDance to acquire social media app TikTok’s business in certain countries including the US. In this report, we analyze Microsoft’s business model, its market opportunities including the potential TikTok transaction, competitive positioning, valuations, risks, and finally conclude with whether an investment in the company’s stock offers an attractive balance between risks and rewards.