MSFT Moves With Tech Stocks opened all over the map despite a drop in initial jobless claims and a better than anticipated March retail sales report. A 7.4-magnitude earthquake hit northeastern Japan after 10am EST and the market thumbed. Shares of MSFT were up marginally and then dipped in the negative with the rest of technology. Upcoming catalysts include
fiscal third quarter earnings to be announced on April 28 at 5:30pm Eastern Time; any entrance in the tablet market;
Windows Phone 7 adoption with hardware partner
Nokia; strides against current market leaders in cloud computing; gaining search market share with
Bing /
Yahoo! partnership; and continued momentum of
Kinect. The stock currently trades at
8x Enterprise Value / TTM Free Cash Flow, inexpensive compared to historical trading multiples.
Software Coming To Cars As Soon As Microsoft Jumps In The Passenger Seat With Toyota
(PC World) Microsoft and
Toyota plan to use Windows Azure to build a telematics service that will initially serve people who have the Toyota's electric and plug-in hybrids. The system will handle GPS, energy management, multimedia applications and any in-car technology connected to the Internet. It will allow people to monitor and control cars remotely. Stories have been circulating that Google and Apple are also working on in-car technologies.
Read » Microsoft Creates New Business Division, Capossela Now In Charge Of Ad Budget (VentureBeat) A week after Microsoft Senior Vice President of Central Marketing Mich Matthews announced plans to leave, Microsoft announced his replacement will be former Office marketing chief Chris Capossela. Capossela will lead a newly created Consumer Channels Group at Microsoft, which "brings together Microsoft's Retail, Mobile Operator and Distribution teams into one organization." His title will be senior vice president of the Consumer Channels and Central Marketing Group, and he will report to COO Kevin Turner.
Read more on how he holds the keys to Microsoft's advertising budget at Business Insider.
Read » Microsoft Should Buy MySpace For Growth (Seeking Alpha) Really? Last time I checked,
MySpace wasn't growing at all. In fact, it was hemorrhaging visitors. None the less, the columnist, while impressed by Microsoft's respect for shareholder value, the company has limited growth prospects. Microsoft has already expressed confidence in the social media model through its $240 million investment in
Facebook. Purchasing MySpace is a logical next step (it's a step, not sure how logical it is). It is a cheap growth opportunity that could produce synergies with Microsoft's Bing search engine. Facebook would love that move.
Read » A Fund Manager That Is Anti-Apple And Long Microsoft! (Yahoo! Finance) You want contrarian, free-thinking fund management? Does that even exist? Greg Estes, portfolio manager at Intrepid All Cap Fund, has been characterized as "real independent thinking on Wall Street." Estes believes Apple is overvalued. And he loves and is long Microsoft. Way to be contrarian Greg!
Read » Daily Trader: Let's Make Some Money With Microsoft (Seeking Alpha) The stock is ready to outperform. The catalysts?
- Roll out of Windows 7 has been well received and should be a large upgrade cycle.
- Office 2010 should also contribute growth as corporations continue to upgrade.
- Bing continues to improve and take market share slowly in the search market.
- Pristine balance sheet with any number of opportunities to make strategic acquisitions.
- Earnings estimates continue to rise for both this year and 2012.
- New higher weighing in NASDAQ 100 should drive inflows as index funds rebalance.
Given these factors, the stock should be trading at a more appropriate 12-13x, not 9x.
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