As you may have seen, my first article covering American stocks was published on Stockopedia last week. The article picked out four U.S. stocks, which had moved up, or dropped down in the StockRanks. After this introduction to the American market, I'm starting a fortnightly column on U.S. stocks which have passed through Stockopedia’s GuruScreens.Once again, this promises to be another interesting project because, as I've said before, I have a particularly keen interest in hunting out value within the market. So, I'll be looking for undiscovered gems myself.
A new CEO
Microsoft shares have surged to a new 52-week high during the past few days, helping the company to qualify for the 52 Week High Momentum Screen. Over the last year, the company's shares have outperformed the S&P 500 and NASDAQ by 23.2% and 21.5% respectively. Microsoft's shares have appreciated in value thanks to a number of factors.
Firstly, sales have expanded at a CAGR (Compounded Annual Growth Rate) of 8.2% for the past five years, while EPS have grown at a CAGR of 10.2%. Sales have grown thanks to the success of the Xbox, as well as rising demand for cloud computing and office software. It is likely that investor sentiment has been further bolstered by the change of management, as long time CEO, Steve Ballmer, departed earlier this year.
Furthermore, the company has a fierce competitive advantage within the technology industry.The group's return on capital employed (21.8%) is in the top 10% of both the IT sector (-2.61%) and the wider market (1.94%). Similarly, Microsoft has a operating profit margins (31.8%) that exceeds 95% of the wider market (mean 5.23%) and IT sector (mean -5.28%).
Finally, after buying part of Nokia in April, Microsoft stated that it planned to cut $600m per year in costs within 18 months of closing the acquisition. It's now been revealed that up to 12,500 jobs will be cut, just under 10% of the company's global workforce of 127,000.
The group is relatively cheap trading at a forward P/E of 16.6, compared to the market average of 17 and sector average of 23.4.
In demand
Boeing has been one of the market's best performers over the past five years, outperforming the market by a staggering 65%. This impressive performance has partly been due to Boeing's world-beating and unrivalled commercial airplane line up and…
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