Microsoft (MSFT) was undervalued in the 4th quarter of last year when it was $27. At the time it had a 2014 Fair Value of $32. 19% upside within two years wasn’t bad.
Then, last quarter, MSFT sailed up to $33. This was the time to sell as 2014’s Fair Value was $34.
Now MSFT is $32, where it should be, and profit estimates are weak for the next four quarters. This stock has limited upside, your money would be of better use elsewhere.
One Year Chart
You can see in the one-year chart MSFT spent a long time in the high-$20s. Then when it popped with the rest of the conservative stocks in the first half of 2013, the stock shot up to $36 (above its Fair Value).
Then last month MSFT put out an underwhelming earnings release. The company missed by 9 cents, and more importantly future quarterly estimates came down by 5 cents to 11 cents for each of the next three quarters. You can see this on the Earnings Table (link below).
Fair Value
This stock is right around where it should be. There’s nothing happening here.
Sharek’s Take
I was watching this stock last year because I felt it would move from $27 to the low-to-mid $30s. It made that move, then proved it can’t go any higher. I’m not close to buying this stock right now, little profit growth is forecasted for the next four quarters and the shares aren’t undervalued.
View the Earnings Table here. View the Profit History here.View the Ten Year Chart here.
