Time to Sell Microsoft

TIME TO SELL MICROSOFT

By www.ProfitableTradingTips.com

http://www.profitabletradingtips.com/

http://profitabletradingtips.com/trading-investing/time-to-sell-microsoft

Is it time to sell Microsoft or short the

stock in trading if you do not own it?



the wall street journal writes

about Microsoft’s Cloudier Future.


http://www.wsj.com/articles/microsofts-cloudier-future-heard-on-the-street-1422385931


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Microsoft has had a new CEO for a

year during which time the stock

rose thirty percent.



Then Microsoft released second

quarter results and poor projections

for the year to come.



the stock tumbled by 9% tuesday

afternoon, on pace for its worst

single-day drop in 18 months,

following monday’s release of fiscal

second-quarter results and the

company’s accompanying outlook.



the midpoint of microsoft’s revenue

outlook for the current fiscal quarter

is nearly $3 billion short of wall

street’s consensus forecast.



some of that relates to currency

effects and struggles in china and

japan.



but some reflects the fact that

microsoft is transitioning a rather

large business to a new model, and

not getting any uplift from a stagnant

personal computer market in the

meantime.



so investors are left with a quandary:

is microsoft an aging tech giant that

is scrambling rather late in the

game?



or is it a fast-growing cloud business

that also generates sizable profits in

a legacy business?



The question the Journal poses is

whether to look at the stock as a

failing tech company or to focus on it

promising cloud business and huge

legacy business profits.



Bad News



Microsoft does not like the prospects

for the rest of 2015.



Microsoft warns of soft sales and

incomes as they transition to a cloud

business and otherwise adjust their

business model.


http://www.businessinsider.com/microsoft-warns-of-bumpy-2015-revenue-2015-1


the first reason, mentioned

repeatedly, was that businesses are

no longer frantically upgrading their

xp pcs anymore.



microsoft ended support of xp last

year, forcing all companies using the

old operating system to move to a

newer version already.



most moved to windows 7. but now,

buying patterns have returned to

their normal “pre-xp” levels.



that means that windows sales to

businesses will shrink compared to

the boom going on last year.



the company mentioned several

times on its earnings call that it’s

having trouble with sales in the big

growth market of china.



it is also struggling in japan. the

strong dollar means unfavorable

foreign-exchange rates compared

with last year.



that will hurt revenue to the tune of

4%, microsoft warned.



The future for Microsoft is their cloud

computing business which they are

financing to a tune of $1.5 billion this

year.



There will be a lag between giving

away these services to entice users

and getting to charge at a later date.



The question is if it is time to sell

Microsoft or short the stock while all

this is happening and wait to buy at a

later date?



Not Just Microsoft



It was not just Microsoft that was hit

recently.



The strong dollar has hurt sales and

services for other companies as well.



Caterpillar fell seven and a half

percent on poor earnings forecasts.



bloomberg notes the Caterpillar

plunge in stock price.


http://www.bloomberg.com/news/2015-01-27/u-s-index-futures-decline-as-microsoft-drops-on-license-sales.html


caterpillar plunged 7.5 percent after

forecasting 2015 results that trailed

estimates as plunging oil prices

signal lower demand from energy

companies.



The dollar is too strong and low oil

prices have reduced demand for

Caterpillar equipment in the energy

sector.



It is not only time to sell Microsoft but

many other stocks as well.


News & Politics

Time to Sell Microsoft