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MSFT Flat As Market Trades Sideways
With mixed economic news out this morning, shares of MSFT are trading relatively flat. Upcoming catalysts include upgrade cycles of Office 2010 and Windows 7; any entrance into the tablet market; the launch of Windows 7 mobile; any adoption of Azure (cloud computing); and gamer reaction to Kinect. The stock currently trades at 8x Enterprise Value / TTM Free Cash Flow, inexpensive compared to historical trading multiples.
Microsoft Wants To Take Over China (The Wall Street Journal)
Microsoft has a huge potential market in China; nearly every U.S. tech company does. The country is the world’s second-largest PC market by shipments behind the U.S., creating a widespread need for software. And Microsoft has healthy government relations with China, so far. Simon Leung, Microsoft’s chief executive for the Greater China region, talked with The Wall Street Journal about how cloud computing can help stop piracy, how Bing competes with Google and Baidu, and how Microsoft can catch up with Apple in the smartphone race. I laughed out loud on that last one.
Software Veteran Analyst To Microsoft’s Rescue (CNBC)
Heather Bellini, an analyst at ISI Group and Wall Street veteran, said there are several events that might make investors take a second look at Microsoft. The mobile strategy will be addressed when Windows Phone 7 comes out in October. Concerns over its tablet will remain until they launch a credible device and she thinks that’s a year away. In the near-term, the company’s board meets in September. That’s when the company usually decides if they’ll return cash back to shareholders via buybacks or if they’ll raise the dividend. Also, the enterprise PC cycle is “really good” and that’s to Microsoft’s benefit.
Which Incubating Business Will Be Microsoft’s Next Cash Cow, If Any? (Redmondmag)
Whether you believe that Microsoft is too dependent on its cash cows or that Microsoft is spreading itself too thin, what will be the next billion-dollar baby in Redmond? Online advertising may bring in a billion in revenues, but it’s also racking up massive losses, so the net is a wash. Some other incubating businesses include: Business Productivity Online Suite; Identity; Desktop virtualization; Unified Communications: Office Communications Server, Exchange Hosted Services and Live Meeting and Voice; Storage (Data Protection Manager); Mobility; and Bing Maps. Those are a lot of darts.
Daily Trader: Bullish Pressure Building (Learning Markets)
There is some bullish pressure building up in the background of MSFT. Looking at Monday’s money flows, $80 million poured into the stock, $217 million flowed on uptick trades while only $137 million flowed in on downtick trades, giving the stock an up / down ratio of 1.58. Microsoft stock has lost 10% during the past month and is currently trading below its 20-day, 50-day and 200-day moving averages.
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