Despite having enormous assets, being a market leader in several fields and having a sizable amount of cash on hand, Microsoft has seen its stock languish in the same price range for years now. In comparison, Apple and Google stock prices have soared, leaving many to wonder what exactly is up with the company that so many of us use in our daily lives. On paper, it looks like the Big M would be a wise investment. In reality, however, it seems to be no better than putting your money in a sock kept in your dresser.
This was the topic of discussion as our own Jon Rettinger joined Richard Williams of Cross Research on CNBC’s Street Signs on Tuesday, August 16th. The conclusion? It really makes no sense why Microsoft’s stock fails to perform. While there were some concerns over the purchase of Skype, and how the company spent $8.5 billion on what most view as just a “free service,” both Mr. Williams and Jon agreed that it was too soon to call it a bad purchase. Look at how Facebook, another free service, pulls down billions per year, as well as Google and the apparent lack of revenue streams from search. Though there is always a way to make money if you know where to look.
What do you think? Is Microsoft’s stock undervalued?