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Microsoft (MSFT -0.9%) ticks lower following a downgrade to Hold from Argus; like plenty of...
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Friday, January 4, 10:25 AM ETMicrosoft (MSFT -0.9%) ticks lower following a downgrade to Hold from Argus; like plenty of other firms, it's worried about slow Windows 8 adoption and poor Surface sales. Yesterday, Davenport cut its forecast for Dec. quarter Surface sales to a mere 700K.
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Microsoft’s shareholders are not buying your stock for the cash that the company holds. In fact, most consider your shares strongly undervalued and would like the company to make use of its cash in a value creative manner. Microsoft is paying 3.5% for dividends. This is post company taxes and significantly more than other companies pay these days for a loan considering the tax shield of debt. Microsoft has even the benefit of excess cash on its balance sheet, which returns next to nothing to the company and shareholders. You may or may not agree with my view that your stock could trade around 50 dollar in 2 to 3 years' time (if you happen to execute on your new products). In case you do, would it not be a brilliant idea to buyback stock for half of this price?
Regards and happy new year.
Arkeh