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  • Microsoft (MSFT): Gigabytes Of Value

    Microsoft is a classic example of a beloved company that ran into a .com bubble. Back then, valuations were detached from the fundamentals as expectations of future earnings exceeded any rational limits.

    Almost 15 years later, we are looking at the opposite scenario. Time did its job well. Weak stock performance, combined with persistent profitability and the steady growth of the business, created a convincing value case out of Microsoft. Nevertheless, Microsoft seems to be hated by many due to the years of lackluster performance.

    We see the intrinsic value of the stock being as high as $75 share, making it one of the most attractive value plays out there. We are on the same page with Don Yacktman, a prominent value investor who also acknowledged the attractive value characteristics of Microsoft in one of his interview.

    Disclosure: I am long MSFT.

    Tags: MSFT
    Feb 19 1:08 PM | Link | Comment!
  • McDonald's (MCD): Robust Business At A Fair Price

    McDonald's has a very attractive business profile. Its' proven and scalable business model combined with a well-recognized brand makes this company an attractive long-term investment. However, if the price paid were to be much higher than the intrinsic value of the company, disappointing returns would be possible despite the attractiveness of McDonald's stock. At the moment, the stock appears to be fairly valued in our view and offers an acceptable entry point. However, there are always a number of stocks trading at discount to their intrinsic value, and as such we prefer those.

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    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: MCD
    Oct 31 5:23 PM | Link | Comment!
  • Coca-Cola (KO): Looking For A Better Entry Point

    Coca-Cola is one of the favorite investments of Warren Buffet. Company business is rock solid and growth prospects look fine. Valuation of the stock, in contrast, is not very attractive. We see intrinsic value of Coca-Cola shares at $33 a share, 20% below the share price. Buying a strong business is always a good idea, but buying it at an expensive price is not. In fact, Coca-Cola shares have not had a very impressive performance over the past decade, and this can be attributed to overvaluation rather than business performance.

    (click to enlarge)

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: KO
    Oct 31 5:17 PM | Link | Comment!
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