I like -- no, love -- large multi-national dividend-paying stocks. If you read my musings, you will notice it's a theme I return to over and over again.

But these large-caps can be sleepy sometimes. For instance, Johnson & Johnson (NYSE:JNJ), which has been on a tear lately, basically went nowhere from 2005 to 2012. Except for growing its dividend from $1.32 to $2.40 over that time period, the stock was very frustrating to own.

And sometimes when a stock is going nowhere, the notion of owning smaller, faster-growing companies that are dominating niches and plowing earnings back into the company as the share price rises takes on a certain appeal. I applaud this notion, within reason, especially when it's supported by facts.

I believe such facts are now on hand to support a more aggressive allocation to small-cap stocks. Specifically, while the Russell 2000 Small-Cap Value Index (NYSEARCA:IWN) has posted similar returns to the S&P 500 (INDEXSP:.INX), the valuations are quite different. Whereas revenues for constituents of the S&P have grown by just under 5% over the past 12 months, revenues for the companies within the Russell 2000 Value are up 9.7% year-over-year. More importantly the growth in net margins for small caps is 11.2% versus 9.6% for the S&P 500.

In my view, this comparison, though apples to apples, nonetheless masks an even greater mispricing of small-caps. That is, large-cap P/E ratios may be distorted because earnings are being grown at what I see as unsustainable margin improvements. By focusing instead on Net Assets to Equity Ratio, which is truer than a traditional metric such as Return on Equity, a different picture begins to emerge as the former takes into account pension liabilities.

Small-cap stocks have the reputation of being riskier, young companies whose stock is more volatile than the broader market. This reputation is warranted. Certainly no one talks about JNJ "blowing up." This is one reason why stock-picking among small-caps, rather than broad-sector bets, can deliver alpha.

With this in mind, here are some of my favorite names, which are included in my firm's small-cap separate accounts strategy: Cheesecake Factory (NASDAQ:CAKE), Lancaster Colony Corp (NASDAQ:LANC), Owens & Minor (NYSE:OMI) and Wolverine World Wide (NYSE:WWW). Portfolios focusing on low-volatility, high-quality small-cap stocks may be able to reduce overall portfolio volatility and achieve better returns. Growth-oriented investors should start rotating into small-caps, as they could come back into favor soon.

This article by Oliver Pursche was published on Minyanville.

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Disclaimer: The views represented on this blog are those of the individual authors only, and do not necessarily represent the views of Schaeffer's Investment Research.

Microsoft's (NASDAQ:MSFT) decision to rid Windows 8 of the Microsoft Points currency system appears to be just a part of the company's planned updates. The Xbox could soon be rid of the mock currency as well, according to The Verge.

Traditionally, users looking to make purchases via Xbox Live would have to use the credit card associated with their account in order to purchase Microsoft Points in set blocks. From there, the user could then use this pseudo-currency to purchase movies, music, additional content for games, and more.

While this seems like a minor hassle in order to complete a purchase, users have long been irritated by the redundancy of the system, which is not unlike using a foreign currency exchange. The difficulty in assigning a true monetary value to a single Microsoft Point, as opposed to blocks, has also proven to be a point of frustration.

As a fan of Activision's (NASDAQ:ATVI) Call of Duty series, I've found myself frequently counting down the hours along with friends for the release of new downloadable content. Cool factor aside, when the download finally released and I would be ready to jump right into it, more often than not, I had forgotten to stock up on Microsoft Points in advance.

As millions of fanboys like myself began to delve into their newly acquired content, I would then have to fight with the overcrowded servers in order to purchase my points. If the content was 1,200 points, and the available blocks were being sold in units of 400, 800, or 1,600, I would be required to either spend more money on an unwanted excess of points, or go two rounds against the servers, and re-enter a credit card number, only to then be able to purchase the download with my finally acquired points.

User friendly? Not so much.

Rumors of Microsoft Points' extinction have been around for years, however, and with Microsoft set to reveal its new console on May 21, the decision to nix the currency could be critical. In the age of one-click purchases, the need to pay real money in exchange for fake money before being able to make a purchase won't fly for long.

Additionally, next-generation consoles are expected to become the juggernaut of the living room. Beyond video games, Xbox has already integrated Netflix (NASDAQ:NFLX), movies, music, and some live sports, thanks to a deal with ESPN. Pay-per-view, iTunes (NASDAQ:AAPL), and movie rentals don't demand you convert your real cash before making a purchase, and if Microsoft Points are kept around, the barrier to purchase they create could be detrimental to Microsoft's ultimate goal.

"We now have a tremendous opportunity to transform [the Xbox] into the center of all things entertainment -- from games, music and fitness to news, sports, live events, television series, and movies -- so consumers have one destination for all their entertainment needs," said Nancy Tellem, who joined Microsoft in 2011 to lead the effort to develop an Xbox studio.

The plans to switch to real currency could be announced in June at the annual Electronic Entertainment Expo, colloquially referred to as E3.

Gift cards, credit cards, and debit cards should all be supported with the new system and the money will be usable within the Windows Store, the Windows Phone Store, and on the Xbox.

By allowing the user to use the same credit within each of the stores, Microsoft finally makes the purchasing process as simple as it should have been all along. It also begins to blur an important line by making your console, phone, and computer seem more like one seamless system, rather than three separate entities.

Sony's (NYSE:SNE) PlayStation Store, meanwhile, already utilizes cash and just one network, within which users of their PlayStation 3, PlayStation Vita, PlayStation Portable, and the PlayStation Mobile can all make purchases, some of which are accessible on multiple platforms.

While Microsoft may have been beaten to the punch, it is by no means too late. The shift to actual cash will be crucial, as Microsoft's ability to maximize profit in the upcoming console generation will rely heavily on whether or not users can buy into the idea of an Xbox becoming their epicenter of home entertainment, and ease of purchase is definitely a factor.

This article by Jake Barach was published on Minyanville.

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Disclaimer: The views represented on this blog are those of the individual authors only, and do not necessarily represent the views of Schaeffer's Investment Research.