Is Microsoft an Attractive Investment?

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With shares of Microsoft (NASDAQ:MSFT) trading around $36, is MSFT an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Microsoft is engaged in developing, licensing, and supporting a wide range of software products and services. The company also designs and sells hardware and delivers online advertising to customers. It operates in five segments: Windows and Windows Live, Server and Tools, Online Services Division, Microsoft Business Division, and Entertainment and Devices. As a mature company, Microsoft is also offering a stable dividend, which is currently yielding around 3.32 percent annually.

Much to the chagrin of gossips everywhere, Microsoft director John Thompson wrote in a blog post Tuesday that the board will not be choosing Steve Ballmer’s successor until early 2014. Speculation has swirled over who will become the next CEO of a struggling company that was once a powerhouse in the tech industry, but it is now clear that Microsoft is not willing to rush its decision as Thompson explains, “We identified over 100 possible candidates, talked with several dozen and then focused our energy intensely on a group of about 20 individuals, all extremely impressive in their own right. As you would expect, as this group has narrowed, we’ve done deeper research and investigation, including with the full board. We’re moving ahead well, and I expect we’ll complete our work in the early part of 2014.”

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