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Steven Kiel
Steven Kiel
Articles (136)  | Author's Website |


March 31, 2011 | About:


About the author:

Steven Kiel
Steven Kiel is the president and chief investment officer for Arquitos Capital Management, a Virginia-based investment management firm. He is a graduate of George Mason School of Law and a captain in the Army Reserves. He manages two spoke funds, The Freedom Fund, a value-oriented portfolio, and The Hayek Fund, a portfolio dedicated to free market principles. He can be contacted at [email protected] or through the firm's website at www.arquitos.com.

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Rating: 3.7/5 (6 votes)


Avishek - 6 years ago    Report SPAM
i think activist investors like ackman, icahn, dan loeb, michael price and even einhorn should get together and launch an activist attempt to unlock value in msft...the balance sheet is too strong to have that much cash..may be a special dividend or share repurchase is a good idea...the stock is definitely cheap..and shareholders have virtually got nothing in the last decade...
Cm1750 - 6 years ago    Report SPAM
MSFT has been trying to utilize cash. They initiated a $3/share special dividend a couple years ago and has a decent current 2.5% yield.

One problem is much of the cash hoard is overseas and is subject to repatriation taxes. Mgmt has tried to address this by issuing U.S. debt to buy back shares. If Congress allows a 5% repatriation tax holiday, MSFT will likely bring it back and use it to buy back undervalued shares.

The shares are cheap now, but the reason for the massive stock underperformance in the last decade is the P/E was way too high before. EPS growth has averaged 14% in the last decade. Looking at MSFT's financials without knowing the company name, one would think it deserved a 14-15x P/E.

The problem is there is no product catalyst and many money managers are hesitant to buy a stock with no price momentum. They would rather focus on GOOG, AMZN, AAPL etc.

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