Liking the price action in Microsoft

I don't like the idea of Microsoft Corporation (NASDAQ: MSFT) bidding for Yahoo! Inc. (NASDAQ: YHOO). Hey, everything may turn out rosy in the end, it may turn out to be just what the Seattle software juggernaut needs in its effort to keep the competitive threat of Google Inc. (NASDAQ: GOOG) at bay, but I still shudder at the amount of cash being offered for the internet portal.

I do, however, like Microsoft, and have been waiting for a price drop in its shares so that I may get in on it for either a short-term or long-term timeframe (well, I suppose those are the only timeframes available, come to think of it). I'm liking Microsoft's fundamentals more and more, especially now that its Xbox franchise has been doing well. And I'm particularly keen on its cash-flow prospects and its ability to raise its quarterly dividend in the future (yes, even with the Yahoo! purchase).

That being said, you've got to like the interesting set-up here for a trade. If the stock gets close to the 52-week low, I'm going to have to strongly consider it for my portfolio. At $37, I was reluctant to chase it; at $26, it's suddenly become attractive to me again.

Disclosure: Steven Mallas may buy Microsoft shares after this post.