Microsoft Corporation (NASDAQ:MSFT) is Edinburgh’s third largest 13F holding and made up 12.2% of its 3Q 13F portfolio. The tech giant expects to see revenues up nearly 10% in FY2013 (ending in June) with a suite of new – and old – products leading the way. New additions to Microsoft’s offerings include a tablet and the Windows Mobile operating system. Upgrades from the Office Suite products and operating system (Windows 8) should also help. It appears that Microsoft is one of the cheapest tech stocks around with a P/E of 14.5x and a forward P/E of only 8x. Ken Fisher – long-time Forbes columnist and founder of Fisher Asset Management – is one of Microsoft’s top-name investors with over 18 million shares (check out Ken Fisher’s biggest bets).
Illinois Tool Works Inc. (NYSE:ITW) is a manufacturer of industrial products and equipment, and is also Edinburgh’s fourth largest 13F holding. The equipment company pays a 2.4% dividend yield, and on a P/E basis, Illinois trades at 15x earnings despite being up 30% over the last twelve months. This is well in line with Dover Corporation (15x). A key growth driver for Illinois should come by way of increased auto demand, pushing its equipment segment higher. Longer-term demand should be driven by entry into international markets, notably China and India. Billionaire Ken Griffin – founder of Citadel Investment Group – upped his stake by almost 1500% last quarter (check out Ken Griffin’s new picks).
Wal-Mart Stores, Inc. (NYSE:WMT) is a massive global retailer with revenues expected to be up over 4% in FY2013 and FY2014. Wal-Mart trades well in line with its major competitor Target on a P/E and a P/S basis. Other news shows Wal-Mart making an effort to infringe on Target’s territory, with the opening of a number of stores in Target’s native territory of Minnesota. Both companies are managing to gain market share with low-priced consumer product offerings, and have managed to mitigate downside economic pressure thanks to a robust portfolio of discretionary items. Warren Buffett is the top fund owner in WMT of those we track with over 46 million shares (check out Warren Buffett’s new picks).
To recap: Edinburgh has a notable top-heavy portfolio of mega-cap stocks with a tech concentration. Microsoft and Cisco trade on the relatively cheap side in the their industry, but Google has some of the best growth prospects. Illinois and Wal-Mart should also perform well on the back of a rebounding economy. Read more about Edinburgh’s top picks here:
Is Cisco As Cheap As It Looks?
Is Illinois Tool Works A Good Stock To Buy?
Can Microsoft Corporation Break Out?
Disclosure: I have no positions in any of the stocks mentioned above
