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I liked these notes (and Lone Pine in general) from the Sohn inv. conference. Hoping to get back into MSFT at lower prices.



- Mala Gaonkar (Lone Pine Capital): Long Microsoft (MSFT). Value hidden in legacy tech. 1.5B installed office users globally, only 250M actually pay for it. New stronger management (Satya Nadella). Built the cloud platform Azure. Works with 3rd party software, no more "saving Windows first." Solid mid-to-high single digit revenue growth. Most controversial aspect of this pitch. Fear is consumer Windows will die, but it is only 5% of revenue. Enterprise software is 17%, and more more sticky. Mainframes still a $5bn annual business and they are using MSFT software. "Price elastic market" very stick in ADBE, Autodesk as well. Cloud is 10% now, growing faster than the rest of the business. Office 365 more than doubles users. Reduces piracy. Operating cost cuts. Been no restructuring since dawn of PC age. Spend $1bn marketing consumer Windows. Cloud shift cuts costs - no commissions to pay resellers. Capital return, has way too much cash. Raised share buybacks, but should be much higher. Could earn 3.89 next year, fro 3.04 this year.


Read more: http://www.marketfolly.com/2015/05/sohn-investment-conferenc...

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