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Go to 24/7 Wall St. and read great coverage of the Microsoft (MSFT) earnings call.

Here is what I wrote about Microsoft in May of 2006:

What price would I be buying Microsoft at? Like I said, this isn't normally the kind of company I would be buying. It is definitely in an industry where there is a lot of uncertainty – at least beyond the Windows franchise (which I do think is completely secure).

For the most part, this is a stock I wouldn't be able to value well enough to buy, because of the future and my lack of understanding of the business.

Having said that, I would certainly buy shares if they reached $17. Before that, I would have some trouble making a decision. The margin of safety simply wouldn't be wide enough in an area I don't understand that well. Maybe I will get a better feel for the company and its competitive position as I look into the stock some more (and write about it here). But, unless and until that happens, it would be hard for me to buy at a price much greater than $17 (where I think it would pretty much be a sure thing).

Because of share buybacks and other changes since 2006, my sure thing price would now be more like $17.50.

Earnings power in terms of free cash flow is probably around $1.75 a share.

No entrenched, wide-moat business this size trades for 10 times its cash earnings power.

Is Microsoft a growth stock?

No.

Is it cheap?

Yes.

If you need to buy a big cap stock, buy Microsoft at $17.50 or less.

Source: Microsoft Is Cheap