The Broad Market Index was up 2.24% last week and 68% of stocks out-performed the index.
The upcoming Securities & Exchange Commission (SEC) filing update of annual financial statements will give us insight on the overall growth trend. Stay Tuned.
Microsoft Corp (MSFT) $369.850 BUY this rich company getting better
Microsoft Corp (NASDAQ:MSFT) has been an exceptionally profitable company with persistently high cash return on total capital of 45.5% on average over the past 21 years. Over the long term the shares of Microsoft Corp have advanced by 314% relative to the broad market index.
The shares have been highly correlated with trends in Growth Factors. The dominant factor in the Growth group is the EBITDA Gross Margin which has been 88% correlated with the share price.
Sales Growth up again
Currently, sales growth is 7.4% which is low in the record of the company but rising. This the first increase in sales growth since its peak in late 2021. Sales growth has been 61% correlated with the share price with a five-quarter lead.
Margins looking great
The company is recording a rising gross profit margin. SG&A expenses are low in the record of the company but falling. Higher gross margins and lower SG&A expenses are producing a leveraged acceleration in EBITD relative to sales.
The company is recording a high and rising gross profit margin. Sales, General & Administrative (SG&A) expenses are low in the record of the company and continue to fall.
Note that the company has room for further cost containment but for now rising costs is only dampening the strong gross margin and slightly slowing the EBITDA growth rate and cash flow. While profit margins are rising inventories keep falling. Inventory turnover (relative to sales) continues to fall indicating that products are not sitting on the shelf
Nice Cashflow
Free cash flow growth remains around its highest level on record and continues to rise. As a percentage of sales: free cash flow measures the relationship between cash flow growth and capital expenditures. The stronger gross margin and lower costs is producing an acceleration in the EBITDA profit margin and supporting free cash flow growth as well.
Interesting Yield of 3%
More recently, the shares of Microsoft Corp have advanced by 31% since the October, 2022 low. The shares are trading at upper-end of the volatility range in a 13-month rising relative share price trend.
More recently, the shares of Energizer Holdings have advanced by 11% since the March, 2022 low. The shares are trading at upper-end of the volatility range in a 17-month rising relative share price trend. The current indicated annual dividend produces an interesting yield of 3%.
However, the current extended share price and the broad strengthening in fundamentals provides a good opportunity to BUY the shares of this evidently decelerating company.
The more stable the pot appears, the better the attributes. Green and gold are good. Red is bad and the more intense the red the more urgent the call to action.
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