The use of mass microcomputers today sounds trivial, but it is a feat that would be unlikely without the development of Microsoft software. Abundant net cash, segment leadership and a market value of £1.5 trillion are some of the positive indicators for the investor who wants to become a part owner of the company through shares on the US stock exchange. Microsoft, by the way, is highly established and has been in the financial market for more than 30 years.
When it went public in 1986, one share cost a modest £0.10. Today, it is quoted at £210.
Founded in 1975 by Bill Gates and Paul Allen to sell a system that worked with the first microcomputer ever released (the Altair 500), the giant almost emerged from a supla bluff, which they called offering the software, To the surprise of the two young Harvard students, it worked. The two then founded the company, which in 1980 fell in favour of IBM. In 1995 they launched Windows, software present in 98% of computers.
The image of Bill Gates, who mixes creative genius with philanthropy and is attentive to the world’s greatest problems and needs, also takes advantage of Microsoft’s good reputation. “It is a highly consolidated company, which has multiple sources of income. Profitability is absurd and it pays dividends in dollars to shareholders. It aims to pay £2 per share by 2020,” says finance specialist and founder of the Wealth in Days channel on YouTube, Carol Dias. “Investing abroad is already very positive, for two reasons: first, because the world’s biggest companies are abroad and have lots of cash. Second, because there is protection for the dollar,” Carol emphasizes.
Speaking of Microsoft’s cash, there are GBP 137 billion, debt of GBP 84 billion and net cash of GBP 53.6 billion, which makes it a company with negative net debt, the expert explains. “This is a very important detail for the investor. It means that if the company needs to use all its cash to pay debts, it still has a lot of money. This is fundamental to evaluate, especially in a period of crisis”. In the last 12 months, Microsoft’s valuation was almost 60%. “It was more appreciated than the S&P500 index,” Carol recalls, compared to the US stock market indicator, which includes all the major US companies.
Like other technology giants, Microsoft has never focused solely on the most successful product (in this case, Windows and the Office suite). It is present in the market for video games, browsers, mobile phones, personal computers and tablets. It also owns the internet communication software Skype, voice and video. “Another legal trend for them is the archiving of data in the cloud, something that is increasingly interesting and useful for companies,” recalls Ágora’s head of financial products, Felipe Peixinho. The pandemic, like other major technologies, helped Microsoft. For example: the demand for the game XBox Live reached a maximum of 775%. In the third fiscal quarter, the technology giant reported a profit of 10.75 billion pounds.
Investing in Microsoft
According to finance expert Carol Dias, there are no reserves for investors who, being willing to bet abroad, want to invest some of their capital in Microsoft shares. “They have cash, rising profits, negative debt. Demand is simply growing, people are working from home and need the office package. It’s a safe brand. Some people wonder: ‘but what if it breaks’? With the cash they have, they pay off their debts without problems”.
To buy Microsoft shares, you must open an account with an overseas broker. There are Spanish companies already operating in the United States that offer platforms entirely in Portuguese. Certificates issued in Britain that represent shares of companies abroad. This modality, however, is only available to professional investors or to those with more than 1 million pounds invested. Microsoft is also part of the package of companies present in technology funds and ETFs focused on the sector. However, in this case there will be swings thrown by other companies.