Microsoft is the world's largest independent software developer. The company was founded on the MS Windows operating system and MS Office business applications suite for PCs. As it has grown, Microsoft has expanded into enterprise software with Windows Server, SQL Server, Dynamics CRM, SharePoint, Azure, and Lync; hardware with the Xbox gaming/media platform and the Surface tablet; and online services through MSN and Bing. Microsoft acquired Skype, the internet VoIP communications service, in October 2011. More than 50% of revenue is generated outside the U.S.

Stocks are solidly higher Friday morning, led by good earnings from various companies (with Amazon and Intel leading the charge) as well as a jobs report that is being broadly interpreted as meaning that Fed will indeed cut interest rates further next week. Traders may finally be starting to look ahead, positioning themselves for a world in which the name of the next U.S. president will be known, the economy will remain on solid footing, interest rates will continue to head lower, and inflation will finally hit the magic 2% level.

Microsoft develops and licenses consumer and enterprise software. It is known for its Windows operating systems and Office productivity suite. The company is organized into three equally sized broad segments: productivity and business processes (legacy Microsoft Office, cloud-based Office 365, Exchange, SharePoint, Skype, LinkedIn, Dynamics), intelligence cloud (infrastructure- and platform-as-a-service offerings Azure, Windows Server OS, SQL Server), and more personal computing (Windows Client, Xbox, Bing search, display advertising, and Surface laptops, tablets, and desktops).

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.