With Microsoft (NASDAQ:MSFT) making major announcements this week and currently trading at its lowest level in months, is the blue-chip member a BUY, a WAIT and SEE, or a STAY AWAY?
Microsoft is one of the world’s largest technology companies, but its name is much more synonymous with boring. Mr. Softee has been slow to make a name for itself in regards to portable devices, online search and social media. It is trying to change its reputation and company fundamentals, but the early results are not encouraging.
The Surface was recently launched by Microsoft as an attempt to gain/protect market share in the consumer and business tablet industry. With a new operating system, built-in kick stand and keyboard, the device does appear to be very interesting, but sales are not attracting the kind of excitement that Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) seem to create on a routine basis. Speaking to the French daily Le Parisien, Microsoft’s chief executive Steve Ballmer recently said that sales of the company’s new Surface tablet are “starting modestly,” and declined to give an exact sales figure. Microsoft later claimed the comment was in relation to supply issues and distribution.
Digitimes also reports that according to upstream component suppliers, the Surface RT tablet may see sales reach only 60 percent of Microsoft’s forecast by the end of 2012. “The sources pointed out that Surface RT, as well as Asustek Computer’s Windows RT-based tablets, do not have an advantage in terms of a price/performance ratio, while Windows RT’s lack of supporting software from the previous Windows system and can only use software downloaded from the Windows Store has greatly reduced the attraction to consumers.”
A = A-Level Management Runs the Company?
Steve Ballmer joined Microsoft in 1980 as the first business manager hired by Bill Gates. He later became the CEO in 2000. However, his tenure at the the company is already too long according to many. Earlier this year, Ballmer was named the worst CEO of a large publicly traded American company by Forbes.
Adam Hartung explains, “Not only has he single-handedly steered Microsoft out of some of the fastest growing and most lucrative tech markets (mobile music, handsets and tablets) but in the process he has sacrificed the growth and profits of not only his company but ‘ecosystem’ companies such as Dell (NASDAQ:DELL), Hewlett Packard (NYSE:HPQ) and even Nokia (NYSE:NOK).”
Late Monday, the company also delivered another complication for investors looking at Microsoft’s management team. Steven Sinofsky, a 23-year veteran at Microsoft who was widely presumed to be a favorite for the chief executive’s position in the near future and was the man behind the company’s recently launched Windows 8 operating system, has left the software maker. The move was completely unexpected and many are wondering if it was part of a process by current chief executive Steve Ballmer to get a firmer hold on the company. Ballmer reportedly told employees in a memo on Monday that: “Steven Sinofsky has decided to leave the company.” Through a media statement he later added that it was “imperative that we continue to drive alignment across all Microsoft teams, and have more integrated and rapid development cycles for our offerings.”
E = Equity to Debt Ratio is Close to Zero
The debt to equity ratio is a measure of a company’s financial leverage. A high ratio generally represents that a company has been aggressive in financing its growth and operations with debt. While this may improve some metrics such as earnings in the short-term, too much debt can have disastrous effects in the longer-term.
Looking at Microsoft’s financials for its quarter ended September 30, 2012, it has a very strong debt to equity ratio of 0.77. This includes total liabilities and total stockholder equity. In comparison, Google (NASDAQ:GOOG) and Apple have ratios of 0.32 and 0.49, respectively. Facebook (NASDAQ:FB) has one of the lowest ratios in the tech industry with 0.12.
Although Microsoft’s ratio is higher than other major tech companies, it has plenty of cashfor operations and new projects. The company’s total cash position of cash and equivalents and short-term investments equaled more than $66 billion at the end of its fiscal first quarter.
Money isn’t everything, but it sure helps. Microsoft’s healthy balance sheet buys it plenty of time and resources to make attempts to reinvent itself. Unfortunately, it has yet to do so. Despite mostly positive reviews, the jury is still out on whether or not the new Windows 8 will spark a catalyst for the stock price. The same can also be said about the Surface tablet. Some may be quick to write off Microsoft and its consumer product offerings, but the Xbox should provide some level of hope. Taking into account these components of our CHEAT SHEET framework, we find that Microsoft is a BUY for investors seeking a solid dividend north of 3 percent and a cash rich balance sheet. However, shares are a WAIT and SEE for investors looking for strong capital appreciation and an improvement in management.
＊ アジア本社を新設 （北アジア、東南アジア、オセアニア、中国、インド）ヨーロッパアフリカ本社と南北アメリカ本社の並列
＊ 北アジア地区コントローラはUS Expat
＊ 日本と韓国などのコントローラはシャッフル 日本のコントローラは今の韓国の韓国人コントローラが昇格 (米系企業日本法人では社長とコントローラーの両方に、日本人が就任することは稀です。理由は、日本人同士で組まれると内部統制が危いと考えるからです。）
What began as a weak day in the stock markets ended in the worst rout in more than two years, as investors dumped stocks amid anxiety that both Europe and the United States were failing to fix deepening economic problems.
With a steep decline of around 5 percent in the United States on Thursday, stocks have now fallen nearly 11 percent in two weeks. Markets have been plunging as investors sought safer havens for their money — including Treasury bonds, which some had been avoiding during the debate over extending the nation’sdebt ceiling.
Sparking the drop was an unsuccessful effort by the European Central Bank to reassure the markets, which instead ended up spooking investors. The bank intervened with a show of support to buy bonds of some smaller countries, but not Italy and Spain, whose mounting troubles have come into the spotlight. This was taken as a sign that the recent rescue packages by Europe could soon be overwhelmed by the huge debt burdens in those two countries.
Investors were further unnerved by a candid remark by José Manuel Barroso, the European Commission president, who seemed to confirm fears about the sense of political paralysis. Rather than play down the problems, as European officials have done since the debt crisis began last year, he said, “Markets remain to be convinced that we are taking the appropriate steps to resolve the crisis.”
With investors in the United States already focusing anew on fragile economic growth and high unemployment, waves of selling of stocks began in Europe and continued throughout the day in the United States. Analysts said the market still might have further to fall, as investors reassess the dimming economic prospects. In the short run, attention will be focused on critical unemployment numbers for July to be released on Friday morning. And some in the markets are already questioning whether the Federal Reserve has done enough to mend the economy and whether it could soon take further steps to stimulate growth.
On Thursday, more than 14 billion shares changed hands, the heaviest selling in more than a year. In addition to being unnerved by weaker economic data reported in recent days, investors appeared to lose their optimism about the strength of corporate profits that had driven increases in the stock market in the first half of this year.
At the close, the Standard & Poor’s 500-stock index was down 60.27 points, or 4.78 percent, to 1,200.07. The Dow Jones industrial average was off 512.76 points, or 4.31 percent, to 11,383.68, and the Nasdaq was down 136.68, or 5.08 percent, to 2,556.39.
The S.& P. 500 has now fallen 10.7 percent from 1,345 on July 22, underlining the new negative investment sentiment about the economy and about Europe.
“We are now in correction mode,” said Sam Stovall, chief investment strategist at Standard & Poor’s. “We could have another couple of weeks to go before it bottoms.”
NYSEやNASDAQに代表されるアメリカの株式マーケットで、貯金の一部を運用しているお話は何度かさせて頂いております。1-2年前の注目株といえば、Apple, Baidu, Netflixでした。このうちAppleは既にIT産業では世界第一位の時価総額になってしまい株価上昇もしなくなっています。また、中国最大の検索エンジンのBaiduは数年間に株価が14倍になりました。急成長を株価が折込みつつありアップサイドも鈍化しています。
未だにあがり続けているのは、スマートフォーンやタブレットマーケットの成長と連動する企業群です。映画のストリーミングサービスのNetflix、そして、つい先日上場したインターネットラジオのP (Pandra Media)と就職ネットワークのLNKD (LinkedIn)でしょう。上場してまだ1ヵ月なので株価は乱高下していますが、時価総額を見る限り、特にPandra Mediaはアメリカ市場から世界市場への展開の可能性を考えると数倍から数十倍になるポテンシャルを私は個人的に感じています。