Is MSFT undervalued and a good buy at this $24.xx level? a) Yes b) No
that’s two different questions, no? “The market can remain irrational longer than you can remain liquid.”
Don’t worry about the good buy part then. Is MSFT undervalued? a) Yes b) No
I really have no idea about Microsoft, but the current market is absolutely terrible for finding significantly underpriced stocks right now. Only those fraudulent or suspected fraudulent Chinese companies are at nominally attractive prices based on the basic rules of thumb.
99 cannon and some of the large companies - they seem relatively cheap versus the market even if you adjust for low growth. I don’t work with such models but that is my opinion- for example MSFT, HPQ, INTC etc seem much reasonable than the rest of the market
florinpop Wrote: ------------------------------------------------------- > 99 cannon and some of the large companies - they > seem relatively cheap versus the market even if > you adjust for low growth. I don’t work with such > models but that is my opinion- for example MSFT, > HPQ, INTC etc seem much reasonable than the rest > of the market What about OC? it came up on a stock screen I ran the other day. At first glance the valuation looks attractive but I really need to take a deeper look it myself and I wont have time until after L3. It definitely has a significant exposure to the RE market which is likely why the valuation is so low, but I have a long investment horizon (5+ years) and I don’t think construction will remain depressed forever. No opinion on MSFT right now.
yes. cash flowing blue chip. disclosure: long MSFT
MSFT looks undervalued, but the big question about them is their CEO. Is he really good enough to run this ship?
Palantir Wrote: ------------------------------------------------------- > MSFT looks undervalued, but the big question about > them is their CEO. Is he really good enough to run > this ship? Palantir = Einhorn? I’ve liked MSFT for a while, but i’m becoming increasingly upset with the co. The equity has done nothing this year and it broke ABOVE the 200 DMA for a total of maybe 5 trading sessions. Balmer is holding the co back and I think that their acquisition of Skype was pretty stupid.
I hated MSFT 10 years ago at $24 and I can’t say I like it any better now.
What metrics we all looking at for measures of value here: From Yahoo Finance: MSFT $24-25 PE LTM 9/10x PS 3x PB 4x Current ratio 2.76 The D/E ratio looks skewy. Wonder what other people get. Anyway, on the basis of PE and CR yes, PS and PB, no. Pass.
I think Microsoft is undervalued but it will continue to underperform in the current condition that it is in. It is investing in tons of money losing businesses. Ideally they need to sell off non core businesses and focus on their crown jewels: Windows and Office. Those are the cash cows. Until someone forces them to take these kinds of actions I think the stock will continue to underperform.
I’d like to think our discussions pushed the stock up in a big way today… and I will mention Einhorn’s comments at the Ira Sohn Conference in a footnote 
Sweep the Leg Wrote: ------------------------------------------------------- > I hated MSFT 10 years ago at $24 and I can’t say I > like it any better now. Agreed. Their core businesses have decayed, but the gaming division seems to be doing well. Net negative.
name one exciting catalyst, and then we’ll talk
Jscott24 Wrote: ------------------------------------------------------- > name one exciting catalyst, and then we’ll talk Quantum computing.
MSFT is undervalued right now. The durability of CF is strong and EV/EBITDA looks inexpensive. There should be limited surprises in my opinion, so I’m not really seeing it as a value trap. Someone above asked for a catalyst, but I don’t think you need a business related catalyst on this type of play. It is trading at cheap valuations relative to the market/industry with limited risk of CF deterioration, which is the thesis in my opinion. The main risk, as stated above, is management making stupid acquisitions. MSFT needs to come to grips with the fact that it would be more profitable not attempting to dominate every segment of the tech market and instead focusing on optimizing margins on its recurring revenue from core businesses and continuing to develop the growthy gaming business.
brain_wash_your_face Wrote: ------------------------------------------------------- > MSFT is undervalued right now. The durability of > CF is strong and EV/EBITDA looks inexpensive. > There should be limited surprises in my opinion, > so I’m not really seeing it as a value trap. > Someone above asked for a catalyst, but I don’t > think you need a business related catalyst on this > type of play. It is trading at cheap valuations > relative to the market/industry with limited risk > of CF deterioration, which is the thesis in my > opinion. > > The main risk, as stated above, is management > making stupid acquisitions. MSFT needs to come to > grips with the fact that it would be more > profitable not attempting to dominate every > segment of the tech market and instead focusing on > optimizing margins on its recurring revenue from > core businesses and continuing to develop the > growthy gaming business. Who the hell cares about multiples and strong CF when you just accumulate cash and do nothing with it? $50b in cash just sitting there on the balance sheet. Even businesses losing money look accretive next to drowning in unused cash, hence the terrible Skype deal. The only good thing is that Ballmer is feeling enough pressure that we may actually see a ramp up in share repurchase to soften to critique
Jscott24 Wrote: ------------------------------------------------------- > Who the hell cares about multiples and strong CF > when you just accumulate cash and do nothing with > it? You’re right, who cares about the financial results or valuation, they need to GROW!!! While it is seriously frustrating to watch massive balance sheet cash just sit there, the financial results and stability are superior and do not justify the current valuation. Anything else it is a distraction in my opinion. As I stated above, management decision making is the major risk in this investment. Someone above pointed out that the stock price was $24 ten years ago…what were the multiples?
ASSet_MANagement Wrote: ------------------------------------------------------- > Palantir Wrote: > -------------------------------------------------- > ----- > > MSFT looks undervalued, but the big question > about > > them is their CEO. Is he really good enough to > run > > this ship? > > > Palantir = Einhorn? > > I’ve liked MSFT for a while, but i’m becoming > increasingly upset with the co. > > The equity has done nothing this year and it broke > ABOVE the 200 DMA for a total of maybe 5 trading > sessions. > > Balmer is holding the co back and I think that > their acquisition of Skype was pretty stupid. Ha. Loled when I saw that this morning. People talk about LinkedIn being sign of a bubble forming, but at least LNKD is profitable. Now certainly, MSFT has always been one step behind everyone, whether it was the PC, browsers, etc. But the problem is that MSFT is really the same exact company it was 10 years ago, in a landscape that is continually dynamic, it just makes you look like a fat, lazy monopoly. Jscott24 - There is nothing wrong with sitting on a huge cash pile and doing nothing with it. It is much better than overspending on an acquisition using that huge cash pile. If there are no good opportunities, you should sit there and do nothing.