One of the keys to our TRADING strategies at HX Research is repeatedly returning to the same stock ideas.

Once we identify a “winning” company, we can wait for the shares to stumble and swoop in to take advantage of the opportunity.

This strategy works particularly well with some of the all-time best long-term "winner" stocks.

This week's HX Income idea is one of those companies. One of the most outstanding companies AND stocks in history.

We see a nice chance to generate some income from the shares, and we will reboot an opportunity we took advantage of back in August.

Here is the idea…

The company is Microsoft Corporation (NASDAQ: MSFT). We are guessing you have heard of it…

It was founded as "Micro-Soft" (short for "micro-computer software") back on April 4, 1975, in Albuquerque, New Mexico, by childhood friends Bill Gates and Paul Allen. From its humble beginnings in that Alburquerque garage, it has grown to be one of the two largest companies in the world.

We are sure you are aware of the stock's success, but let's look at just the last ten years of the stock price…

Across this time, the stock has gone from a little above $30 per share to a recent high of $467 on July 5, 2024. That is an incredible +1450% in just ten years!

The company saw that great share price performance on the back of strong earnings growth. Here is the table showing the EPS growth across the same period…

As the company has built out its cloud business, it has seen massive growth in its earnings per share. This has led to a significant expansion in their earnings multiple.

As they have experienced this growth, they have also had an excellent track record of beating analysts’ earnings estimates.

Here is the table showing the results for the last few years…

They have missed only ONE quarter – back during the COVID transition period in 2022. Going back even further, they have missed only three quarters dating back to 2013. The company clearly has operational momentum.

This has resulted in the company seeing rising earnings estimates. Here is the chart showing their 2025 EPS analysts' estimates…

The chart shows that the company saw negative EPS revisions during the post-COVID period. This was similar to its technology peers.

Since early 2023, though, the estimates bottomed and moved higher – taking the stock along with it.

You can see in the chart, though, at the very end there has been a slight tick down in those estimates.

Here is the stock chart for the last couple of years along with the relative strength index or “RSI” of the stock…

We last recommended getting involved with the stock last August when the market faced a steep sell-off.

Right now, the stock is not as oversold, and the RSI was recently only below the 40 level.

Still, the stock has done very little since that high in July. This is despite the fact that they have put up some outstanding numbers over the last two quarters.

What is going on?

Not much in our view. The company continues to report strong results, but there are some mild investor concerns about the pace of its investments and growth in its cloud business.

Our view is that the shares will move higher as long as the company continues to deliver the overall numbers – and the cash flow.

As we mentioned previously, the stock is not as oversold as it was back in August but still has a relatively low RSI.

Here is a table showing what has happened over the last ten years when it has traded at this RSI level …

The stock has been below this level approximately 70 times over that period. If you bought the stock, you made a high single-digit return almost three-quarters of the time three months later.

Remember that with our put selling strategy, we don't even need the stock to go up. We just need it to not go down anymore.

With the company executing and the stock consolidating, we think this is an excellent opportunity to generate some income. We want to reboot this income opportunity and sell the options.