Thursday, October 18, 2012

Is Microsoft A Value Trap? | AllFinancialMatters

I read an interesting short piece in this morning?g WSJ about how Microsoft?s fate.

I want to concentrate on the last paragraph:

?It [Microsoft] has reportedly ordered three million to five million Surface tablets that carry the software for this quarter versus 17 million iPads sold last quarter. If its orders prove justified, that will be good enough. If Windows 8 flops, this value stock will turn into a value trap.?

??turn into a value trap.??

From the look of this chart, it looks like Microsoft already is a value trap:

Microsoft Adjusted Closing Price History

I might misunderstand ?value trap? but it looks like Microsoft will reach the $32 range and then fall back to $29 or so and sit there for a long time. Then, it will announce earnings, get a little bump back to $30 ? $32 and then fall right back down again.

That said, the stock is up 14% this year (the S&P 500 is up over 18% this year on a TR basis).

Source: http://allfinancialmatters.com/2012/10/18/is-microsoft-a-value-trap/

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