Morningstar profiles Andrew Massie, co-manager of the Mackenzie Cundill Value Fund (the fund that for many years was managed by the legendary value investor Peter Cundill).
He talks about the fund's investments in Dell and Microsoft:
The investment case for either stock isn't readily apparent, Massie acknowledges. "If you look at Dell and Microsoft on a hard price-to-book basis," he says, "you would never own either one of them."
What Massie finds appealing about Dell is that it is "morphing" into a higher-margin service company, and is more than just a low-margin hardware provider. "That is something we think the markets aren't truly appreciating," he adds. "We were really happy to buy Dell averaged down at $8 a share."
As for Microsoft, Massie notes that the company generates an awful lot of free cash flow and has had positive earnings for the last 40 quarters. "It is a company that is not appreciated," he says, "but definitely in terms of net asset value they do hit the sweet spot."
There's more worth reading -- so check it out.
On another subject, this is yet another Friday where I don't have time to do a "Five for the Weekend" segment. But let me wish all Canadian readers a happy Canada Day. And a happy July 4th to my fellow Americans.