What Happened When Alex Kenjeev Paid His Student Loan in Cash
Behind the Spritz: What Really Goes Into a Bottle of $100 PerfumeM
icrosoft (MSFT) reported third-quarter earnings Thursday after the bell, but the stock did not rally. In fact, shares of the software behemoth fell 2.77% or 87 cents in after-hours trading, after dropping even lower several times. Does this mean the business isn't a viable idea right now?
Actually, I'm feeling kind of bullish on the company. I'm writing this ahead of Friday's opening, so I don't know if the pessimism is going to carry over into the new session, but I'll say this: If the stock is still down nearly a buck, I might be tempted to start a position. And before the weekend, too!
Why do I feel this way? Well, I was nervous before the report was sent to the market, as you can see from my preview. I wasn't interested in betting money ahead of the data.
Now that the earnings event has come and gone, I'm not as scared. In fact, a pullback could be useful for a quick trade. Like I said in the article, there are some convincing technical arguments in support of the Microsoft thesis.
Fundamentally, the business is a blue-chip concern, one you can be fairly confidant about. And as for the third quarter, I thought it was pretty good. Net income came in at 45 cents per share, three pennies ahead of the analysts. Cash from operations increased roughly 20% for the nine-month period, according to the corporate press release. Current valuation on the shares isn't bad, either, although they aren't as cheap as they used to be.
I don't know, maybe I'm crazy to even think about buying Microsoft as a trade, considering it's at the top end of its 52-week range. We'll see what happens, but as for current holders, I don't believe you need to sell out of your position. Over time, this technology entity should offer slow, steady growth.
Disclosure: I don't own any company mentioned (although I am strongly looking at Microsoft); positions can change without notice.
Goldman Earnings Sink After Buffett Dividend
Johnson & Johnson's Income Falls 23%
Burberry Shares Leap on Sales Update
Reader Comments (Page 1 of 1)
4-23-2010 @ 9:43AM
Dan Barnett said...
Today's looking a little shaky at the start, so put the fears of the weekend (you'll have to explain that one to me someday) aside and take a shot at picking up MSFT on the dip. It's at about $31.25 as I write.
Understand that you'll never be able to time the dip exactly so there may be some down-side potential; but if you're as optimistic as you say, there's certainly time to get in.
Pay absolutely no attention to the year high. Remember where we were a year ago? The dumpster would be the polite word. Every stock that ISN'T hitting year highs are the ones to worry.