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Eric Aceves
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Mr Aceves has been investing in the financial markets for over two decades and became involved in the financial services industry as a retail stockbroker in 2002 . His speciality was individual stocks, with an emphasis on superior service for his clients, which included being avaliable to speak... More
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  • Microsoft: Time to "Leap?" 0 comments
    Jul 12, 2010 5:43 PM | about stocks: MSFT

    After the carnage in the market , it was good to see a nice rally this past week.

    Even though that occurred , it was also nice to have the market give us an opportunity to get into one of the most successful and cash rich companies in the world .

    That would be none other than Microsoft (MSFT)  I think it is pretty safe to say we have heard of them and have used their products at some time in our life .

    One of the products that did fail was the KIN mobile phone which was pulled only 50 days after being out on the market . This was obviously  not one of their better moves in their long successful history.

    This does not bode well for their next entry which would be the Windows Phone 7 which is due to come out in the next few months, but even though that might not pan out for them there are some nice positives .

    Nearly three fourths of the company's and nearly all of its profits come from the non consumer business side . This would include Windows 7, XP , and Vista .

    The company has thirty seven billion dollars in the bank , thus they have the capability to raise the small dividend if they choose to in the future .

    According to market research giant IDC, sales of software is expected to jump 3% this year as businesses start to upgrade hardware and software that was postponed during the beginning of this recession.

    In addition, Microsoft has stated they have recently shipped far more copies of Windows 7 -150 million and counting than almost anybody foreseen.

    At twenty four dollars and change , this looks like a gift that the market has bestowed upon us , and I think it is time to take advantage of buying into this world class company .

    In my opinion , this stock revisits its old 52 week high of the low thirties in the future giving an investor a gain in the neighborhood of twenty five percent .

    The other way to play it would be to purchase either the Jan 2012 20 call options that are currently in the price range of $ 6.65 per contract .

    Aggressive investors might take a look at the Jan 2011 20 call options that are currently in the $5.50 range . 

    The delta for the former is currently at .75 , while the latter is at .80 . 

    For the right investor, owning the LEAPS would allow the thesis time to develop while committing only a fraction of the cost of 100 share purchases .

    This is for informational purposes only, please consult with a licensed professional before investing .

    Investor assumes all risks .









    Disclosure: Long Jan 2011 and Jan 2012 20 call options
    Stocks: MSFT
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  • Its nice to see the mining stocks like SLW pull back today . They were a bit over extended in my opinion.
    Jun 22, 2010
  • I like SLW and GG at these levels . The rally in the dollar is short lived in my opinion
    Jan 21, 2010
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    Jan 16, 2010
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