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MSFT Creeping Up With Market
Stocks are being lifted this morning, extending the two-day rally, on positive earnings reports. Shares of MSFT are up marginally in early trading. Upcoming catalysts include upgrade cycles of Office 2010 and Windows 7; any entrance into the tablet market (even just as an operating system); the launch of Windows Phone 7; any adoption of the company’s cloud computing efforts; and gamer adoption of Kinect. The stock currently trades at 9x Enterprise Value / TTM Free Cash Flow, inexpensive compared to historical trading multiples.
Microsoft Is The Rodney Dangerfield Of Investments (Seeking Alpha)
No matter what they do, they cannot get any respect. According to Peter Mycroft, at current levels, a Microsoft investment shouldn’t keep one up at night. The company has been consistent throughout its entire history, with 90% operating system market share and 9 out of every 10 users is accessing the Internet with Microsoft. He touts that if you believe the Internet is going to become a greater part of life, then Microsoft must be a core holding in everyone’s Internet portfolio strategy. I’m not buying it. The Internet will be more a part of life, the PC won’t.
Microsoft Finally Finds The Cloud (Business Insider)
I love having Matt Rosoff on my team. Some thoughts on the recent launch:
- Cloud computing company Zoho says Microsoft will draw more attention to online productivity applications, but that’s about it. Why? One of the big benefits of cloud services is that users can access them from anywhere on any device, including mobile devices. Microsoft has tiny market share in mobile so the desktop dominance of Windows and Office won’t necessarily help it’s cause. Microsoft also has a history of using proprietary or closed technologies to lock customers in once they’ve made a choice. That’s not going to change.
- Microsoft and New York City announced a big new contract for 100,000 city workers to use Microsoft software and services. This is a good example of how Microsoft can use its existing contracts to win business for its cloud based services. When existing contracts (Office primarily) come up for renewal, Microsoft will pitch cloud-based services as a partial replacement. Expect to see similar deals in the future.
- Google Enterprise President Dave Girouard says that Microsoft’s cloud announcement, Office 365, is just a “reshuffling” of the same old online services and packaged software with a fancy new name. He did however acknowledged that Google is seeing a lot more of Microsoft on sales calls.
Mossberg Says: Go Buy An iPhone Or Android Device Before A WP7 Phone (All Things Digital)
Influential technology columnist Walt Mossberg has weighed in on Windows Phone 7 operating system and his verdict is to go buy an iPhone or Android device. The system is “not fully baked” and lacks “killer innovation.” He cannot recommend that Windows Phone 7 is competitive with iPhone or Android just yet. On the tablet front, Jay Yarow at Business Insider points out that Lenovo’s directory of Technology, Howard Locker, believes that the parent system, Windows 7, just won’t work for tablets.
Daily Trader: Bullish Pressure Building (Learning Markets)
Microsoft has lost some ground in recent trading, but it appears there is bullish pressure building up in the background. Looking at recent money flows, $66 million poured into the stock. $240 million flowed into the stock on uptick trades while only $174 million flowed in on downtick trades, giving MSFT an up / down ratio of 1.38. The stock has lost 1.3% during the past month and is currently trading above its 20-day and 50-day moving averages but below its 200-day moving average.