Microsoft Stock History: For many years, people have been wondering when Microsoft Corporation (NASDAQ:MSFT) stock would break out. They have been wondering when this tech company would finally get the same recognition as many others, such as Apple and Google.
According to some, this day may be coming in the near future. There are many, including Mark Travis of Intrepid Capital Funds, who feel that now is the time to buy Microsoft Corporation (NASDAQ:MSFT). He is one of the 450-plus fund managers we track here at Insider Monkey.
Travis was recently interviewed on CNBC’s Squawk Box, discussing the current state of the market as well as why Microsoft may be on the up and up.
The host started out by discussing the fact that people have been waiting for more than a decade for Microsoft to pick up traction. She then gives Travis the chance to explain why that time may finally be here:
“I would say at Intrepid Capital, most of the places where we have added value over the last decade have been smaller to mid-cap size equity. Microsoft is somewhat outside of our typical strike zone, but as I would like at it, looking across its enterprise value over the last decade or so, prior to Lehman’s failure in ’08, you had a quarter of the cash on its balance sheet, and it traded at a 14-times multiple of its operating income.”
Once Travis was done discussing the past history of Microsoft Corporation (NASDAQ:MSFT), he went on to add some more information pertaining to where the company stands at the present time:
“Today, you have got $68 billion in cash, where you had $23 billion in cash four and a half years ago and it trades at a seven-multiple of operating income. The way I tend to relate to operating income relative to enterprise value is if I wrote a check for the entire company and its liabilities, I get a roughly 14 percent pretax yield. And in an environment where you have got suppressed rates, 10 year treasury at 185, I think owning a monopoly business like Microsoft, and a dividend rate that is almost 200 percent of that 10 year rate, that is a bet I am willing to make.”
Do you agree with Mark Travis and his thoughts on Microsoft Corporation (NASDAQ:MSFT)?
The full video can be seen on the next page: