Tech Company Microsofts MSFT Fundamental and Technical Analysis

Discussion in 'Growing and Managing a Business' started by Scottypops, Jul 26, 2010.

  1. Scottypops

    Scottypops
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    Despite a possible double dip recession and plummeting price action, Microsoft is one of the strongest dividend stock picks right now for the New York Stock Exchange. Although Microsoft has just about monopolized the ‘PC’ market, it faces rivaling technology through upcoming fourth generation phones, a recent innovative take on tech by their rivals Apple through their iPad and iPhone releases.

    Despite this ever evolving market and whether Microsoft will take any hits from these semi-related markets, they have just announced a record profits quarter for Spring 2010. Have these positive earnings turned into positive price action? No not at all, with the fear of the double dip recession markets have held back and Microsoft is no exception plummeting a whopping 20% in just 2 months.

    Consider these positive earnings as a kind of fail safe for future results, yes the price action in the short term has plummeted but dividend stocks are intended for long term trades; with a possible 20% gain as well as dividend profits MSFT could be a diamond in the rough for long term trades, consider the $31 cost per share of just 2 months ago. A 20% gain is very realistic over a years time between a $4-6 rise per share as a profit target.

    So where has the computer market been recently and where does Microsoft stand? Despite it’s record company profits the gaming industry, affecting Microsoft’s XBOX series, has seen a massive 20% profit loss in recent months but MSoft’s profits come mostly from their base computer markets where they still completely monopolize the industry. On the mobile phone side microsoft has been actively promoting their mobile windows 7 OS with mixed success.

    Taking a look at Microsoft’s Computer Operating Systems share over the market they make up a monopoly-like 90% of all OS’s beating out 2nd and 3rd place Linux and Mac OS’s by a huge margin. This translates into massive profits of course for Microsoft over 40 billion dollars in capital gained in their last year and record profits last quarter.

    With such a monopoly in OS’s throughout the every growing and evolving tech market Microsoft has set themselves up as a dominant and stable major company and player in future technology. Despite having only few responses to Apple’s other niche tech innovations they boast record profits and through a fear based ‘double dip’ recession we may just have found a bottom for this high yield dividend based stock.

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  2. Fergal

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    I'm not an expert on the stock market and am not qualified to give advice on investments in stock. However, I would have some concerns regarding investing in Microsoft. They really are being hit on a lot of business fronts such as;

    • The recession, which is impacting on their customers' ability to invest in software and IT
    • An increasing use of competing free, open source products
    • Increased competition from companies like Google

    Yahoo shows that their current share price is $25.81, which is a fall from a high of $37.06 in October 2007. Who knows where it will go in the future, but my prediction is that it has further to fall.
     
  3. Scottypops

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    Microsoft is highly undervalued in my opinion. They just released great earnings the other day and the price went back up to the $26.10 range. Microsoft is one of the best stock picks when it comes to paying dividends.
     
  4. Fergal

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    It will be interesting to see what the longer term trend will be for the Microsoft share price, but well done Scottypops, the price has been increasing since you predicted it and it is now at $26.16.
     
  5. Fergal

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