As part of its portfolio reshuffling strategy for 2020, investment giant David Selected Advisors decided to dilute its stake in Microsoft (MSFT) while simultaneously seeing a strong potential and increasing its stake in the Intel (INTC) stock.
Since the beginning of 2020, the markets have been soaring massively making fresh highs every week. Earlier this week on Wednesday, both S&P 500 and Nasdaq made their record highs. While the Dow Jones Industrial Average (DJIA) continued to soar a further 100 points.
Last year in 2019, some of the top technology companies like Microsoft Corporation (NASDAQ: MSFT), Apple Inc. (NASDAQ: AAPL) and Alphabet Inc. (NASDAQ: GOOGL) did really well, giving investors handsome returns. However, this year, stocks like Tesla Inc. (NASDAQ: TSLA) and Virgin Galactic Holdings Inc. (NYSE: SPCE) have created a massive buzz on Wall Street.
As a result, several financial portfolio managers are working to rejig their investments. Arizona-based investment management firm Davis Selected Advisers has recently done some alterations with its equity portfolio as part of its investment strategy.
Currently, the investment firm manages over 134 highly valued stocks with a total value of $20.91 billion. A majority of the stocks in this equity portfolio are from the financial services sector. However, 11/07% of this total portfolio consists of technology stocks.
As part of its portfolio rejig in Q4 2019, the investment firm’s biggest-selling was for the Microsoft (MSFT) stock. On the other hand, Intel Corporation (NASDAQ: INTC) was its biggest buying.
Microsoft (MSFT) Stock vs Intel (INTC) Stock
David Selected Advisors decided to diversify their portfolio last quarter. The investment company sold nearly 29.04% of its total Microsoft holding that is equivalent to 506,692 shares. during the Q4 2019, each Microsoft (MSFT) share was trading at a price of $147. Since then, the share price has increased by nearly 30% going above $180 levels.
At press time, Microsoft is trading at $184 with a market cap of $1.40 trillion. Over the last many decades, Microsoft is in the computer software and consumer electronics business and one of the most valued companies on Wall Street.
Over the last three years, the company has grown at an average revenue growth rate of 12.6%. Similarly, its three-year EBIDTA growth rate is 21.4%. As per the Peter Lynch chart, the company can be currently in the overvalued range.
On the other hand, David Selected Advisors increased their stake in Intel to 15.14%. During Q2 2019, the company bought nearly 1,107,396 shares of Intel valued at an average price of $56.13. Since then, Intel’s stock price has surged over 15% and is currently trading at $65.45.
Over the last three years, Intel’s average revenue growth stands at 9.87% while its three-year Ebitda growth rate stands at 21.6%. The company has also seen strong growth in its net income. Last year in 2019, Intel sold its smartphone modem unit to tech giant Apple for $1 billion.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.