Portfolio Spotlight Series 1 – Microsoft

In the Portfolio Spotlight Series – i will be going through each holding in my portfolio and the selection criteria for its entry. Stocks are either
1. Great companies with consistent earnings, free cash flow, strong competitive moats. These are first team players
2. Potential growth companies with breakout earnings, growing competitive moats etc… these are hot youth prospects
3. Geographical / sector diversifications.. these are meant for diversification purpose and are reserves

Asset CategorySymbolQuantity

The first in the Portfolio Spotlight series is Microsoft. It is the biggest holding by value in my portfolio and I have strong conviction in this stock mid to long-term. Microsoft currently holds the position of Goalkeeper in my team.

1)Consistent Revenue Growth

Microsoft has consistent revenue growth since FY14 ( 5 years and more) . Not only that, it also has consistent operating income as well.

2)Consistent Free Cash Flow

Microsoft has had consistent free cash flow (5 Years and more). Amazing

3)Market Cap and Revenue Multiple Growth

Microsoft has been growing its market cap and revenue multiple (5 years and more). this is extremely rare for companies and shows that it has a very strong competitive moat which prevents undercutting due to price wars.

4) Consistent Net Income Multiple

Microsoft has had consistent net income multiple. This indicates a management team which is efficient in handling its bottom line. A great management team is very important!

5) Future growth

This last factor is fundamental analysis. Does Microsoft have future market growth driver(s) ? The answer is yes !

Most of Microsoft’s future growth drivers will leverage on its Azure Cloud Platform.

Already, Microsoft is making inroads into Defense sector which is traditionally a value sector (think Lockheed Martin, Boeing etc).

It won a 21.9 Billion USD contract over 10 years with the US Army to deliver more than 120,000 HoloLens AR headsets


With this contract win, Microsoft prove it has the ability to craft new product lineups and with first mover advantage.

Microsoft also won the famous JEDI Cloud contract awarded by the US Defense Department back in Oct 2019, beating the likes of Oracle and Amazon. However Amazon refuse to admit defeat and has launch countless lawsuits to dispute the win, mostly base on the argument that the win was unfairly influenced by Donald Trump as a result of his private disputes with Amazon Chairman Jeff Bezos over The Washington Post.


Microsoft’s current product lineup are
Productivity and Business Processes
1.Office Commercial
2.Office Consumer

Intelligent Cloud
1.Azure Cloud Services

Personal Computing
1.Windows OEM, Commercial & Cloud
2.Devices (Microsoft Surface)
4.Search Advertising

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