Not to long ago I made a case for why I think Microsoft could be one of the best growth stocks over the next 5-10 years. I believe that this company has a tremendous amount of untaped potential and that the right CEO could go a long way to improving the company and capitalizing on all of that unrealized value.
Many people believe, and I am one of them, that the next man to take the helm of this tech juggernaut will be Allan Mulally. Mr. Mulally is currently the head of Ford. He began his role there in late 2006 and during that time he has transformed the Blue Oval. Seven years a go Ford was a dying brand, on its was to 4th place amongst the big car makers (in the US). Now Fords cars are some of the best in the world, they were the only big American car maker not to take a bail out and their stock as well as their image has been on the rise.
Prior to his tenure at Ford Allan performed a similar turn around with plane manufacturer Beoing. An early riser who often works 12 hour days, he has demonstrated an ability to manage massive companies that are not performing up to their potential.
Critics have argued that making cars and computer software are very different animals all together. I agree that this point is fair. Just because someone is successful in one industry doesn’t mean that they will succeed in an entirely different industry. What does a 68 year old car CEO know about the internet, search engines, or gaming consoles?
First off I would argue that he know Bill Gates, the two men are friends. Bill Gates could accurately be described as one of the founding fathers of the internet. With him at Allan’s side the two could prove to be a potent pair. I would also argue that Wall Street loves Mulally. The positive impact of a rising stock price can do wonders to improve a companies image.
In the next two weeks Mr. Mulally should reveal his future intentions. His contract with Ford expires at the end of 2014 and he has already begun to transition out of this position. It’s possible that he could announce his retirement, he has certainly earned.
Most of the speculation about Mulally’s future suggests that he is going to Microsoft. I believe that this will prove true.
Presently Microsoft shares are selling for about $37. If Allan Mulally announced a decision to join the Microsoft management team I am pretty confident that the stock price would spike up over $40, perhaps even as high as $50.
I have been building a position in anticipation of this event. I have been taking a portion of my overtime money and using it to buy shares of Microsoft. I currently have 36 shares and hope to have 50 shares by the end of this year. By the end of 2014 I hope to have between 150-200 shares before Allan begins his tenure as CEO. After that the sky is the limit.
*** Please keep in mind I am not an investment advisor, you should consult one before making any investment decisions. A stocks price can fluctuate based on a countless number of factors.***