2Wk·

Adding MSFT to my portfolio

I recently add $MSFT (-0.62%) to my portfolio. At this price, the IRR to 5 years could be 15% (CAGR).

$MSFT (-0.62%) can be the most important business of the Earth. The world depends of its services.

5 Comments

mvarcox@mvarcox

2Wk

I also hold $MSFT! What are your thoughts on $AMZN? I see up to 20% CAGR in the next years

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Ivan M.@ivancrack

1Wk

@mvarcox I hold $AMZN too. It's dificult to evaluate. Its ROIC is distorted by investments in Capex. The consensus estimates a growth of its revenues of 9%. Operating margins are raising up to 11%. At this price, if margins increases to 12-13% and revenues 10-11%, my fair value for $ 315 for 2029 to 25x EV/FCF, CAGR 10%. If the multiple is 30x EV/FCF, the value increases to 375 or 14% CAGR.

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mvarcox@mvarcox

1Wk

@ivancrack Thats correct, Capex is very high for amazon but I believe they could cut that easily in the following years if they ever what to become more more profitable! I also like their strong operating margins for their AWS business, up 27% in the last year hitting a record of 37% for 2024! Lots to come for amazon in my opinion.

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Ivan M.@ivancrack

1Wk

Yes, it's very important nexts quarterly earning calls for checking if operating margins increase to 13-14-15% o more. Reducing the capex 30-40%, the FCF would be a rocket.

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mvarcox@mvarcox

1Wk

@ivancrack I am guessing that they will not change much in the next few years! I am happy about them allocating their capital and investing in their business. When they decide to become a mature company they can work on becoming more profitable

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