New Trade: Long Microsoft (MSFT) & Short AOL Inc. (AOL)

By: ispeculatornew
Date posted: 05.27.2014 (3:00 am) | Write a Comment  (0 Comments)

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After a very difficult week earlier this month (thanks Rackspace!), things were back to normal last week and with a long Memorial day weekend, I had a bit more time to go over trade possibilities. I did not see as many opportunities as I was hoping for but did end up settling on 2 rather “original” web plays; The dial-up connector vs the Windows maker:) Both companies have changed a decent amount since those days.

Just as a reminder, you can see those trades here:

http://www.intelligentspeculator.net/livetrades

You can see the numbers for both companies involved in today’s trade here:

TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthAnalyst ratingBook ValueBetaRevenue/ShareSales 5Y Avg GrowthEPS 5Y Avg GrowthSales 5Y Avg GrowthEPS 5Y Avg Growth
MSFTMicrosoft Corp40.1214.3113.858.745.63.5310.580.879.38.5617.018.5617.01
AOLAOL Inc37.1220.9814.74-21.545.853.928.63129.9-6.8158.85-6.8158.85

AOL Revenue (Quarterly YoY Growth) Chart

AOL Revenue (Quarterly YoY Growth) data by YCharts

$msftLong Microsoft (MSFT)

In many ways, Microsoft is the “typical” technology blue chip. Thanks to its enterprise business, billions of dollars come in every year which has helped Microsoft develop several solid “side” businesses such as xBox, its cloud services, etc. I’ve also been reading and hearing a lot of very positive things about the company’s new CEO and what his presence will mean for Microsoft’s longer term prospects.

ycharts_chart (1)

Next earnings release: July 22nd 2014

$AOLShort AOL Inc. (AOL)

Ah, AOL is a company that I continue to love betting against a company that has displayed very little in terms of exciting stuff. AOL’s revenues are mostly driven by online advertising which I consider to be very challenging for players not named Google or Facebook. The company has also not had a clear strategy in terms of its future, mobile, etc.

 

ycharts_chart

Next earnings release: August 7th 2014

Disclaimer: No positions

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