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MSFT Sideways/Flat As Tech Dives
Stocks are rebounding somewhat after a weak opening on mixed economic reports. Shares of MSFT are trading sideways near the flat line, as the broader tech market is down. Upcoming catalysts include holiday quarter earnings results announced after the close on Thursday, January 27; Steve Guggenheimer of Microsoft’s OEM Division will speak at the JP Morgan Tech Forum at CES on Thursday, January 6; entrance into the tablet market (to be announced at CES); Windows Phone 7 adoption; strides against current market leaders in cloud computing; holiday sales of Kinect; and continued 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.
Anyone Who Bought And Held MSFT In 1999 Is Still Down 50% (Seeking Alpha)
CapFlow is the term given to the ratio capital expenditures to cash flow. The ratio allows investors to see how much capital spending a company must employ in relation to its cash flow, in order to grow the company. This is important because the lower the capital expenditures are, the greater the owners earnings (OE) are, as long as cash flow continues to grow. Peter Mycroft takes a look at these ratios applied to Microsoft. In 1999, Microsoft had an owners earnings of $0.72 and was selling for $58.375, or 81x; insane. Even now, anyone who bought the stock in 1999 is still down 50%.
Goldman Sachs 2010 Stock Picks, Other Than MSFT, Not Too Shabby (Seeking Alpha)
Thumbs up to Goldman Sachs analyst Sarah Friar’s software picks for 2010. They soundly beat the LikeAssets benchmark and the technology index as well. Vmware had a return of 114% and Citrix with a return of 82% were the champs playing on the virtual desktop and growth of the cloud theme. The only absolute loser out of the five picks was Microsoft (downgraded in the third quarter), which returned -5%. The PC and Server upgrade cycle was unable to translate that into stock gains. It’s nearly time to start tracking the 2011 picks.
Microsoft To Partner With ARM In Tablet Play But Why? (ars technica)
Microsoft is rumoured to announce that it is porting Windows to run on ARM processors. It can be done with either of Microsoft’s operating system lines: Windows NT and Windows CE. But why? It’s true that ARM machines will have better battery. But the real issue of acceptance with Windows tablets will be the user interface is the problem. Read more from Matt Rosoff at Business Insider as he believes Microsoft’s partnership with ARM is finally a step in the right direction. But it’s going to cost them.
Hackers Take Kinect To The PC (Xbit)
Since Kinect motion sensor connects to Xbox 360 using conventional USB cable, it was quickly hacked to work on PCs. South Korean game developer called GamePrix announced plans to support Kinect in its PC-only game in the future. There’s also some precedent for Microsoft moving technology from the Xbox to the PC. A few years ago Microsoft made Xbox Live available to PC game developers. It never really took off. Read more from Business Insider.
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