August 17, 2013, we set a target price for Microsoft at $41. Currently, the price is $39.87 per share, and has paid two dividends at $0.28/share. That is a healthy 29% return since we made our original recommendation.
Therefore, we now ask, “What now?”
Do nothingWarren Buffett is possibly the most famous “buy and hold” investor ever. His typical timeframe for holding a stock is “forever”. If the underlying qualities of the stock are what initiated the purchase, then there should be no reason for one to sell the stock. Just let it keep growing.
The metrics for Microsoft are still strong:
Z Ratio (5.09) shows the company is on sound financial footing. Currently, its debt rating is AAA.Gross margins are 71% and net margins are 27%Revenue grows at 9.23% per year and earnings are better at 14.7%Return on equity is 28%It generates free cash flow at $2.90 per shareWe see a new fair price for MSFT at $56 Learn more at www.tdpresearch.wordpress.com [more]
We are adding Mentor Graphics (NASDAQ: MENT) to our Marketocracy Barnacle Defensive Growth Portfolio. It finally gives us something for our Mid-Cap space, though Morningstar classifies it as Small Cap Core. Based on market capitalization, though, we feel more comfortable calling a mid-cap stock. [more]
I will write more about this on www.tdpresearch.wordpress.com, but this is an outline of why I like MENT. [more]