THE MICROSOFT INVESTOR: Hedge Funds Still Love MSFT Earnings Yield

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MSFT Off As Market Awaits Fed
Shares of MSFT are down over 2% as Wall Street awaits news from the Fed. Upcoming catalysts include upgrade cycles of Office 2010 and Windows 7. The stock currently trades at 9x Enterprise Value / TTM Free Cash Flow, inexpensive compared to historical trading multiples.

Microsoft Still In The Top 10 In Terms Of Earnings Yield (iStockAnalyst)
If you like buying earnings power at a discount, earnings yield is a good place to start. Microsoft still ranks in the top 10 list of stocks with the highest earning yield from the top hedge fund holdings sorted by dividend yield. Microsoft’s stock is down over 40% over the last 10 years as revenues and profits grew substantially. The company still ranks number eleven in terms of net income however. And Microsoft’s cash is on the rise despite fighting off companies like Google and Apple.

Why Don’t You Just Tell Me What Ad You Want To See (Business Week)
To make online marketing messages less annoying (if that’s possible) and more lucrative, Microsoft and a few others are asking Internet surfers to pick the ads they will view. The new ad-selecting tool is called ASq and may step up the development of the $3.1 billion global video ads market, already online advertising’s fastest-growing segment.

Microsoft Tries To Keep Up With Cloud Computing (eWeek)
Microsoft is touting Windows Azure cloud computing platform as the best option for developers. The company better hope so because it’s up against, Amazon Web Services, Google and IBM. This is one of the company’s attempts at staying relevant in this next phase of technology.

How Will Extraneous Variables Affect Microsoft? (Trefis)
Trefis research firm currently has a price-target of $28 for Microsoft’s stock. The key drivers are obviously Windows, Office, Server, Internet, Gaming and Cash. In calibrating the various business lines to a personal expected outcome, investors are able to see the impact on the stock price. How do you think the iPad or PC sales or Window margins will pan out?

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