03 December, 2019

Simple MSFT Analysis with Tableau

2019 is ending and my portfolio is honestly not performing as well this year. 

Not much change has been made since my last update. 
This is actually a good sign as I used to do many transactions to take quick profits. 
Here are some of my recent actions:

Initiated small position in Keppel Pacific Oak Reit
Added more Cisco shares

At work, I have been having fun with Tableau software since finally granted access to it. Users’ license seems to be expensive and naturally, not everyone is entitled to use it. 

In case if you are not yet introduced, Tableau is a Business intelligence software useful for creating interactive Dashboards and powerful data visualization.

It is good to have at least something fresh to learn at work and I take it as a mini skill upgrade. 
However, actual training may be required to create better charts as seen in Tableau Public
There are really many interesting analysis out there. 

So I did a Tableau Dashboard on Microsoft stock (MSFT) just for fun. 

Some notes to consider before we start:
1. Reflected share prices were based on closing prices on the last day of each year. Data is from Macrostrend site.
2. All other measures were retrieved from Morningstar Key Ratios. Basic VBA is then used to run/transpose the data into the required format for Tableau to read. 

The same Dashboard below can be easily refreshed to analyse any other listed companies as long as the same data format can be generated from Morningstar. 
Let’s run through the analysis. 
As they say, "A picture is worth a thousand words" and hence the explanation will be kept short. 

As seen above, Microsoft’s revenue has been growing consecutively since 2010 (using 5 year average).
Net income dropped in year 2015, 2016 and 2018. Further investigations can be made to understand what caused these drops. 

Stock Valuation:
Perhaps PEG ratio is not suitably useful to measure Microsoft since its PEG has been hovering above 1.0 since 2010- which means it is always overvalued. PEG should be more suitable for faster growing companies. 
Formula used for PEG is: [P/E Ratio]/[Rev 5-Year Average  Growth]/ 100

Earnings per share (EPS) has been edging up slower than its book value per share.  
Reason may be because earnings are not growing as fast as asset acquisitions. 
Its P/E is last seen to be below 15 at 14.50 in year 2013. 

Investors are awarded with increased dividends yearly. Payout ratio can be set visible when moused over using Tooltip function.

Financial Health:
MSFT’s current ratio has been stable and above the 2.0 level. 
Debt-to-equity has since been reduced from year 2017. This is a good sign. 
Looking at the bottom area chart, MSFT’s cash flows have been rather healthy.
Inventory level is not quite applicable here since Microsoft is not a hardware centric company. 
Thus, quick ratio is not useful in its context (inventory is found in its formula)

It has been fun creating such views with Tableau. I hope you enjoyed it. 
There are certainly more improvements to be made. Feel free to add on if you have any comments. 

I wanted to do another analysis on the full STI components based on their P/E ratios but was not able to find a legit online source. 
Perhaps P/E ratios have to be calculated by our own?

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