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Berkshire Hathaway Inc. Message Board

  • bengraham650 bengraham650 Jan 6, 2013 5:11 PM Flag

    Microsoft (MSFT) ultimate deep value stock for 2013

    People who want to INVEST must focus on cash flow and cash flow growth. Instead most people end up focusing on too many wrong things. Most people either don't understand or don't study deep enough. For example there is little talk about how is Micrsooft office (largest business), or server/tools or the games (Halo, xbox) is doing. Additionally people are too much focused on noise around windows8 instead of looking at combination of Windows7+windows8+Surface. What if Windows7 continued to sell at the previous quarters rate of 60Million/quarter and we have additional 80-100Million of Windows8 this quarter? Imagine..WIndows division more than doubling sequentially from 3.2B in rev last Q to 7b+ this Q. On a year over year basis that could be well over 50% growth on the windows/live division. Microsoft is a 40 dollar stock. "Price is what you pay and value is what you get eventually" so said Ben Graham. Good thing about value investing is mostly people don't care about what is important like Cash flow and growth in cash flow. This is why there is opportunity created with gap between high value and low stock price offered by Mr Market. MSFT is the ultimate value /growth stock out there right now. With 60Billion net cash. A Cash flow yield of 17% an earnings yield of 15% in addition to the 3.5% dividend yield. And top it off the Cash flow is growing at 17% year over year and the stock is at 6 fwd PE net of cash. Less than half of IBM and ORCL

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    • This is another company that I am very interested in... a lot of people are down on this business (still one of the most profitable in the world) because they aren't growing as fast as they used to... I sold about 200 shares just to help finance more Berkshire stock, and feeling confident in the range MSFT is trading in. I will go back to adding to my position soon...


      Sentiment: Buy

143.60-0.89(-0.62%)Oct 21 4:02 PMEDT