Also in this playlist...
This transcript is automatically generated
Just mentioning shares of tech giants Microsoft Google are getting swiped both companies disappointed after the bell last night.
Joining us now are returning summertime shut down around one -- -- a dollar Porsche have Gary Goldberg financial services and -- Morgan Lander from steeple Nicholas.
Guys welcome back.
It was -- about.
The -- to to be here today is both the view over the last year had a different times recommended shares -- of Microsoft did check he said he liked it it was last October.
And then all over just what three months ago you're talking about Microsoft elected when he what do you like -- not like about it today.
Well keep in mind that Microsoft at this inflection point is still look year to date around 16%.
This company is going through transition.
They're that they're.
They're really at this inflection point undervalued when you consider the free cash flow that's being generated.
It is a growing company so strong revenues around 56%.
And it has nine dollars of cash per share on their balance sheet so -- getting a company that's earning three dollars next year.
Okay 33 dollar price right now nine dollars of cash on the balance sheet two point seven.
-- percent dividend yield.
And the good dividend growth trajectories roughly about 15%.
I really don't watch them.
What an exciting look at Michael -- -- right now on we were down 389 to two and 55 I mean all all everyone -- one quarter ever ever in this.
And everyone's focused on the windows operating system.
But we -- real story here is the enterprise software side of the business makes up roughly 60% to 65%.
Of their total.
Now of that revenue has an 80% of their earnings and that's still growing.
Oliver we just got this big restructuring of Microsoft I mean this is what a -- go see bomber comes out they're -- You know realign some people -- with some people off the books a little bit if you will not I'm sure the key executives of the company but you know kind of -- who's you know communicating and doing what at this.
Yes so we're who we're gonna wanna see how that shakes out of the coming you know weeks and months and and get a little bit more information before we commit new capital to Microsoft that -- states are holding on a fundamental basis I'd be rich -- a 100% spent so if you're very long term investor and you're looking at the next 3567 years.
Microsoft has just fine as an investment we think there's better buys out there so we're looking at other opportunities.
And whenever a company of that size the behemoth -- to go through restructuring and you really have historically a 5050 shot at them being successful or not.
But it's almost like you're saying it's it's a big happens and that's not really one of the things that you favorable talk about the lid on the show but and you're basically -- and that they cap is that this is the problem when you have a bump in the road for someone like a Microsoft Word Google or AMD I mean all of these -- not the one.
Think about Microsoft though is that you're not paying a -- the type of multiple for the stock.
So -- getting a PE multiple it's roughly -- eight times net cash they have no dead.
And you getting paid well for just waiting it out in regard to dividend yield.
So you're gonna have to wait awhile.
Like -- -- suggesting.
But the returns can be quite favorable over the next five years he just have to go through this transition period could which could be quite frustrating for investors -- Well and you just mentioned cool you know stocks also down but were much more bullish on Google and Microsoft because the fundamental reason why the stock is -- -- mr.
earnings is because -- Re engineering and improving their customer experience.
And if that's the case and we heard FaceBook talk about that a lot in recent months.
You know and they're doing that to lay the ground work to really be explosive on the upside from customer experience perspective.
That tends to be followed and we expected to be followed by additional revenues from advertising and click throughs.
And that's very tough here.
Even like mobile advertising exactly why and all -- -- your -- out -- -- attack I think that's a possibility with the Google I mean that is the million dollar question the billion dollar question is who can.
Deliver on on.
For good this new rules the leader in its in its business model and it's going to continue to be a leader and one has just considered it always mega cap companies this -- -- Tech tech stories trading at multiples well below the market so if you can get company like Google like a Microsoft has consistently grown consistently profitable -- Negative -- that much religious.
They do well over a longer period of time all right well we can easily that there a vulnerable well I would just say.
Fundamentally agreed but there's a lots of places we can get good dividend and dividend growth and you don't have to go to the mega caps to do so you've got more upside and some of us.
All the recent talk -- your buck is going to be up there for now but nobody -- that it doesn't we'll see you guys you're both gonna come back later on in the hour we're guessing which none of these two is get -- --
Filter by section