This analysis attributes an Overall Score to a company by analyzing several aspects that I consider to be among the most important.
In summary, a company to have an overall score close to 100% must have the following characteristics:
- Report high growth rates in the last 3 years (and in the last quarter) in terms of Revenue, Gross Profit, Operating Income and Net Income. Furthermore, it must operate with high and improving margins in recent years.
- Analysts expect Earnings Per Share (EPS) and revenues to grow in the short term (in the next quarter) and in the medium to long term (in the next 5 years). Moreover, they expect the company to be undervalued at current prices and in the last quarter their EPS expectations must have been beaten with a consequent rise in share prices.
- The stock price of the company must have outperformed the S&P 500 index and in the last 3 months the Hedge Funds and Insiders bought shares in the company.
The overall score ranges from -100% (if the characteristics listed above are all very negative) to +100% and it is unlikely that there will be a company with a +100% score because the requirements for achieving this score are very high, however a score higher than +40% can be considered good.
This analysis alone is not enough to decide whether or not to invest in a company because it does not provide indications on the timing of entry, but it is a good starting point.
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Microsoft Corp. (MSFT)
Summary
- Overall Score: +59.3%
- Despite the clear outperformance compared to the S&P 500 index, analysts believe the stock is undervalued by 10%
- More generally, analysts expect MSFT to grow in the short and medium-long term
- Hedge Funds and Insiders have reduced their positions on MSFT
- MSFT continues its bullish trend starting at the beginning of 2019, remaining not far from its historical maximum (-2%)
- YTD performance: +38.01%
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Full description
The overall score of MSFT is +59% .
In the last 6 months, MSFT has overperformed the S&P500 index by 12,1% and analysts believe the company is undervalued by 10,1% .
In the last quarter, the company reported revenues of 33717 million, up by 12,1% compared to the same quarter 12 months earlier. Revenue TTM (Trailing-12-Months) are equal to 125843 million, up by 38,1% in the last 3 years.
MSFT reported an operating income of 12396 million in the last quarter, an improvement of 19,4% compared to the same quarter 12 months earlier, also reporting an improvement of 6,6% in the operating margin. Considering the sum of the last four quarters (TTM), MSFT reports an operating income of 42933,0 Million , a growth of 66,7% compared to three years ago and an improvement of 20,7% in the operating margin.
MSFT reported a net income of 10587 million in the last quarter, an improvement of 20,7% compared to the same quarter 12 months earlier, also reporting an improvement of 7,7% in the net margin. The TTM net income is 36797 million , a growth of 79,2% compared to three years ago and the net margin has improved by 29,8% .
In the next quarter, analysts expect growth in EPS (Earnings Per Share) of 8,8% and a growth in revenue of 10,8% . Furthermore, they expect an annual growth of MSFT EPS by 14,5% for the next 5 years.
In the last quarter, MSFT reported better EPS than analysts’ expectations and the stock price reacted by increasing by 0,2% .
Finally, in the last 3 months the Hedge Funds have decreased their positions by 17.6M shares. The Insiders have sold shares worth $31.61M .
Sources & additional info
*Data updated to the last quarterly report available
*Data in Millions of Dollars
*Data from zacks.com, tipranks.com, reuters.com, finance.yahoo.com
This analysis gives you a general idea of whether a company is good or not, but you may also be interested in finding potential entry points, so I am waiting for you here to know about the best chart patterns of today.
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DISCLAIMER: The information in this blog post represents my own analysis/opinions and does not contain a recommendation for any particular security or investment.
