This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

2012 Will be Microsoft's Year

Shares of Microsoft (MSFT - Get Report) remained stuck in neutral in 2011 even though the tech giant's earnings boomed. 2012 is a new year, however, and Mark Freeman, portfolio manager for the WHG Large Cap Value Fund (WWLAX), expects investors to finally take notice of the company's profits and push its stock higher.

"We jokingly refer to it as the most attractive consumer staple that's out there, as opposed to a tech company. It's really about the valuation and I think at some point investors are going to realize that," Freeman said.

The $214 million fund, which garners 3 stars from Morningstar (MORN), is up 2.5% over the past year, putting it in the 46th percentile of Morningstar's large cap blend category. Over the past five years, the fund has lost an average of .5% annually, outpacing 58% of its Morningstar rivals.

While Microsoft's shares have spent the year more or less treading water; the same cannot be said for Bank of America's stock which has sunk more than 50% year-to-date. Despite the company's well-known problems, however, Freeman is a fan of the stock saying, "The business right now is priced to fail and we don't think it's going to fail."

Speaking of turnaround stories, Freeman is bullish on business lender CIT (CIT - Get Report) primarily because of the transformational efforts of its CEO John Thain. "John Thain is paying off their high cost debt. And if they get access to lower cost debt you are going to see a very attractively margined business."

Top Videos of 2011

Pepsi (PEP - Get Report) is another one of Freeman's bigger holdings. The fund manager says Pepsi is one of the most attractively priced consumer staples companies on the market and that "the level of skepticism over their North American beverage component is overdone." As for rumblings that Pepsi will split its snacks and beverage companies, Freeman simply calls that an attractive option and further reason to own the shares.

Finally, Freeman says Johnson & Johnson (JNJ - Get Report) has overcome its quality issues and will once again regain its status as a premier American company in 2012. "The earnings growth profile still looks good and it's also nice to have about a 4% dividend yield on a very high quality company."
Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
BAC $16.36 0.00%
CIT $43.80 0.00%
JNJ $95.17 0.00%
MSFT $43.93 0.00%
PEP $93.53 0.00%


Chart of I:DJI
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 +1.21 0.06%
NASDAQ 4,828.3250 +15.6170 0.32%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs