This week we will review our selection of Microsoft as the Company of the Week.
1 Week Ago – Microsoft Corp (MSFT)
This has been a very good week for owners of Microsoft stock. When we selected the company last week, the stock price was $24.43. Today’s closing price was $25.67, a gain of 5.1%. Last week, the company ended its stock repurchase auction and announced they will only be buying back about 1/5 of the shares they originally planned to repurchase. The fact that holders of the stock did not want to sell at the top-end price of $24.75 illustrates the widespread belief that the price of the stock will rise in the coming months, reaffirming our selection.
In other news (Wall Street Journal Article), the company reached a deal with Facebook Inc. to be the sole provider of ads for the popular social networking site. This news was very surprising mainly because the company Facebook sold the ads to was not Google. Could this be a sign that Microsoft will be able to compete successfully with Google going into the future? We believe it is. Facebook is a major website that many college students use – including the authors of this site and virtually all of their classmates – and the fact that Microsoft controls the ads instead of the more "hip" Google appears to be a sign of things to come.
We reaffirm our belief that the stock has the potential to reach $37/share in the next few years and is suitable for the enterprising investor following Benjamin Graham’s value investing strategy.
Jon currently holds a position in Microsoft (MSFT). Also, please review our disclaimer.
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