Donald Trump 'Trigger Event' Could Send Microsoft Soaring

President of Tax Reform Donald Trump could allow US companies to have access to billions of dollars hidden abroad. Microsoft (NASDAQ: MSFT) could be the biggest winner in the reorganization.

The last quarter, the technology giant said it was sitting at $ 123 million in cash. Of this amount, 95% are abroad.

Shareholders expected the company to exploit those holdings, which generated a wave of dividends and repurchase of shares. The problem with this plan, however, has always been the tax bill would result in repatriation of cash from the IRS. Instead, he chose to keep money management overseas, returns lean winner in money market funds.

This may not be the case for a long time.

During the electoral race, Trump has proposed a tax-free bridge to foreign participation. He called the tax reduction companies pay on the repatriated money from 35% to 10%. This policy, he said, would create a wave of investment and job creation in the United States.

"The Donald J. Trump tax plan will grow the economy and create jobs of about $ 2 million, while the Hillary Clinton tax and reduce the economy will lose 300,000 jobs." Trump's campaign team wrote in a statement Press that describes its policy.

"In combination with the global economic reform program, the Trump economic plan will create at least 25 million jobs over the next 10 years."

Such a triggering event would be an important catalyst for Microsoft's population.

Currently, Microsoft is sitting at $ 117 billion in cash overseas. Investors, however, slap a big discount on that figure to explain the success of taxes. Based on current tax rates, holdings in the company from abroad are only worth $ 76 billion.

A holiday completely change those numbers. According to the proposed rates, Microsoft could save more than $ 29 million dollars. This would provide timely and immediate catalyst of up to six percent depending on the current market capitalization of the bond.

Part of this increase is probably anticipated already by investors Trump price a bridge without tax for a while, so a total of six percent pop is unlikely. But as an ad appears more likely, traders will apply an increasingly reduced discount to Microsoft's cash holdings.

Rental investors would also benefit. If the administration had to repatriate all its foreign money at the same time, it could pay a special dividend of 20%. This would probably be the largest distribution company in the history of the United States.

Leaders are more likely to pay the money for droppers. We would like to see a combination of dividend increases, repurchases and debt repayments. A great acquisition or two would also be on the table.

Microsoft is not the only winner in such a scenario, either.

Apple (NASDAQ: AAPL) has $ 216 billion in cash overseas. Under the proposed tax rate, the iPhone maker could save more than $ 50 billion in tax expenditures. CEO Tim Cook hinted at any reform, likely acquisitions during a recent conference call, but did not provide details until a clear bill was introduced.

Qualcomm (NASDAQ: QCOM) is another giant of heavy box technology. The company that gushes out cash flows and has over 28 billion dollars hidden abroad. If wages of the managers simultaneously all their investments abroad, this would imply a special dividend of 33%.

Meanwhile, investors are ahead of a tax moratorium are facing certain risks.

No one can guarantee that President Trump will keep his electoral promise. If a holiday is given the green light, any reform may not be exactly the same as what was said during the electoral race. Both scenarios could trigger the stock price.

Meanwhile, any change in Microsoft's core activity could hit stocks up or down. If there are holidays it was announced that investor dividends would remain in possession of the stock market.

I'm not too worried, though.

Conservative leaders, however, seem to adhere to their arms over tax reform. Last week, however, Trump's president promised a "phenomenal" tax notice in the coming weeks. This could bring the agenda to a bridge without taxes in 2017 or 2018.

If Trump is true to his promise, analysts start to sondonner