Is Microsoft a Buy After These Events?

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With Microsoft (NASDAQ:MSFT) making major announcements last 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? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for a Stock’s Movement?

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.”

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