the individual who started this thread answers, at least partially, the age old question, Who would ever bother investing in a company that has flatlined for the past 5 years? Enjoy that fat $3 move back to $27 over the next 12 months. Next he'll recommend oracle.
msft is currently range bound 24 x 28 I think is the upper range. Probability wise it holds 24, but if it breaks you are in for a world of hurt
I believe that after that huge drop and 600 mil volume stock is going to at least take out stops below 23.75 area if not worst
uh, oh, stock's gone nowhere on a series of decent'n'very good earnings...imagine what direction it will take after this terrible report/fcast....[?]
settle down everyone, my stop loss is not going to get hit because i don't have one. I actually have limit orders to buy lower again. Its quite re-freshing to see the pessism which re-assures me of the long term qualities of this stock. Also on my list of stocks with political backing are; MO HAL XOM NOC BA BTI take note though; invest @ FV and hold for the long term.
I believe MSFT is the perfect profit-generating machine. A government backed monoply, growing EPS year on year, the best margins in the industry, a butt load of cash, continual success in aquisations, global strength, and a very rosy future. The average P/E for the S&P500 over 50years has been 14.4, more recent decades around 19. MSFT forward P/E is 15 atm. Investing at these multiples in quality stock puts you in at fair value, you will never buy the bottom and sell the exact top, but you will get closer to that than buying when its hot. Ive attached a 20 year chart of MSFT with the P/E ratio below it. As you can see it has the lowest multiple right now that it has ever had, i realise that multiple can go higher if the profits were to drop, but i don't think they will signicantly drop, but more feel a soft patch, so IMO loading up in the low 20's is a good long term bet. Technically speaking, go back in history through your charts you will see the best stocks to have held were the one's that did the most volume per day, e.g. GE, XOM, WMT..... the one's with the most interest in them. MSFT is the leader in daily volume in both NYSE/NASDAQ and worldwide. Historically speaking the days where a big stock like MSFT has a big gap down on huge volume are the best prices in the long term to enter at. Just like big pharma has been hammered in recent quarters, it will prove a good time to have entered for smart money, they knock 'em down only to re-load even more. Let me assure you that the 600 million shares traded on friday, they weren't selling the bid down all day, if anyone was watching the tape all day like I did they would have seen the huge size clipping off after a 3/4c downtick, drift down/pop up all day, there was definately accumulation programs turned on and I would say some decent money has positioned themselves. p.s. P/E isn't the only thing to access value, you have to consider cash-flow, debt(MSFT doesn't owe a penny and has 40billion in cash), market share, management, political strength, brand awareness, and most importantly what wins me over with MSFT the most, is there high barrier to entry from competition, their cash streams are protected.
jonnysharp, The problem with your analysis is that the market doesn't support it! Since the July 2002 low -which was the start of the cyclical bearmarket rally in the Nasdaq- MSFT has been an underperformer as evidenced by its Relative Strength line. It has never been a good idea to put your money in laggards!
It has lagged the QQQQ a bit, but the QQQQ lost 85% of its value top to bottom, MSFT lost 65% of its value, a big difference. It appears your thinking is along the lines of CANSLIM, whilst I can say it has its merits, in a bear market or crash those high flying stocks melt like snow in the sun. MSFT stock price will form a secular bull trend again, but only when everyone thinks it won't is when it starts.
Actually, ORCL is another good long term investment @ around $13 per share, fairly good value. Laugh now, but in the year 2026 when you look up a ORCL quote you will see $250 per share.