Microsoft (MSFT) Has Risen 43% in Last One Year, Outperforms Market
If you are looking for the best ideas for your portfolio you may want to consider some of RiverPark Advisors top stock picks. RiverPark Advisors, an investment management firm, is bullish on Microsoft Corp (NASDAQ:MSFT) stock. In its Q2 2019 investor letter – you can download a copy here – the firm discussed its investment thesis on Microsoft Corp (NASDAQ:MSFT) stock. Microsoft Corp (NASDAQ:MSFT) is a multinational technology company.
In July 2019, RiverPark Advisors had released its Q2 2019 investor letter. The investment firm said that Microsoft Corp (NASDAQ:MSFT) stock was one of the top contributors to the Large Growth fund's performance in Q2 2019. Microsoft Corp (NASDAQ:MSFT) stock has posted a return of 43.8% in the trailing one year period, outperforming the S&P 500 Index which returned 8.3% in the same period. This suggests that the investment firm was right in its decision. On a year-to-date basis, Microsoft Corp (NASDAQ:MSFT) stock has risen by 26.9%.
In Q2 2019 investor letter, RiverPark Advisors said the Large Growth fund posted a return of 7.4% in the second quarter of 2019, outperforming fund's benchmark the S&P 500 Index which returned 4.3% in the same period. Let’s take a look at comments made by RiverPark Advisors about Microsoft Corp (NASDAQ:MSFT) stock in the Q2 2019 investor letter.
"Microsoft: Microsoft shares were our next top contributor driven by the company’s solid fiscal third quarter results, as well as the strong rebound in technology shares during the month (especially for those firms, like MSFT, that are not currently targets of antitrust investigations ). For its fiscal third quarter (ending March), MSFT’s Commercial Cloud revenue grew 41% yearover-year to $10 billion, generating more than 30% of Microsoft’s total revenue. The company’s two other segments, Productivity and Business Processes and More Personal Computing, grew a combined 14% as overall company revenue grew 16% and Non-GAAP EPS grew 20%.
Microsoft has, we believe, entered a second chapter of market-leading growth that will drive the company’s revenue and profits for years to come. Microsoft’s Cloud Infrastructure offering is in the fastest growing segment of the cloud services market (including software-as-a-service (SaaS)), a market that is characterized by recurring revenues, strong pricing, high levels of customer engagement and high margins. The overall Infrastructure-as-a-Service (IaaS) industry is growing more than 30% per year and is forecast to reach $100 billion of revenues by 2021. We believe that cloud-based services can become the company’s largest revenue and earnings producer and expect Microsoft to generate significant and growing free cash flow ($11 billion last quarter, up 19% year-over-year). The company should deliver at least mid-to-high teens EPS growth, with upside from deploying its $134 billion cash balance ($7 billion was returned to shareholders in the quarter through dividends and share buybacks). We trimmed our position on strength, and Microsoft remains a top five position in in the Fund."
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Last month, we published an article revealing that Microsoft Corp (NASDAQ:MSFT) is one of the 10 most profitable companies in America in 2020.
In Q2 2020, the number of bullish hedge fund positions on Microsoft Corp (NASDAQ:MSFT) stock decreased by about 6% from the previous quarter (see the chart here), so a number of other hedge fund managers don't seem to agree with Microsoft's growth potential. Our calculations showed that Microsoft Corp (NASDAQ:MSFT) is ranked #2 among the 30 most popular stocks among hedge funds.
The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds' poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.
Video: Top 5 Stocks Among Hedge Funds
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Disclosure: None. This article is originally published at Insider Monkey.
