Wall Street treats stocks like they’re sprinting. Each quarter, beating or missing investment results can lead to a big move higher or lower.
But investing is like a marathon. Companies that consistently grow over time are rewarded over the long haul, no matter what the market is doing in the short-term. Investors can take advantage of short-term market fears to capitalize on great companies by buying them at a discount, and then letting the long-term take care of itself.
One such slow and steady player is Microsoft (MSFT). The tech giant kicked off tech earnings with an earnings beat. Plus, the company’s cloud services division grew faster than expected, even if there was an overall slowdown.
With a diverse lineup of products and services, the company has a 34 percent profit margin, higher than many businesses. Plus, revenue continues to grow, even if earnings have been impacted by short-term headwinds.
Action to take: Long-term investors can pick up shares at or under $250 and perform reasonably well. Shares yield about 1.1 percent at current prices, and Microsoft has fared well at growing the dividend over time.
For traders, the April $260 calls, last going for about $6.25, can deliver mid-double-digit returns in the coming weeks on a continued uptrend in shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.