Microsoft Corporation (Nasdaq:MSFT) – bullish on fundamental, and speculative factors
Ahead of the launch of its latest Windows operating system, which was designed to run on a tablet, MSFT shares seem to be attracting traders and investors alike.
Never expect fireworks from MSFT shares, as it is a well-managed stock. Even after announcing the Skype acquisition on May 10, 2011, its share price didn't move much. Even after obtaining remaining regulatory approvals for the Skype acquisition, which in all likelihood will happen by end of the year, I don't expect the share needle to move much. Yet, I consider this a bull stock for three reasons. One, the company maintains a vertically integrated and diverse product portfolio with numerous leadership positions, a broad geographic footprint and minimal financial risk. Two, it is currently undervalued (12-month P/E of 9.7) and is waiting to be rerated up. Three, given that Carol Bartz has been asked to leave Yahoo, MSFT has a significant chances of acquiring Yahoo. Moreover, I believe that Microsoft will maintain the technical, managerial, and financial wherewithal to adapt to industry transitions as successfully as it has in the past (such as incorporating internet and mobile functionality within its product sets), or more successfully than its competitors.
Apple Inc. (Nasdaq:AAPL) – Bullish as no clear rival that can topple it, and a seemingly successful management transition
Apple is one of the members in the consortium that recently acquired Nortel's patents and patent applications.
For few days prior to and up to Steve Jobs resignation as CEO, AAPL's share price was under pressure. The very next day, it regained its march upwards as markets learned that Steve Jobs is still with Apple as the chairman.
Unlike MSFT, you can expect fireworks from AAPL. A look at the options chain suggests that there is lot of interest in buying at a strike price of $400 and even at $430. January 2012 options indicate even a possibility of breaking the $500 mark. I won't be surprised if the stock breaks the $430 mark by the end of Q3. There is a remote possibility of testing $500 by the end of Q4.
Synopsys, Inc. (Nasdaq:SNPS) – Bullish on acquisitions and increasing market penetration
Increasing adoption of mobile industry processor interface display serial interface (MIPI DSI) protocol by the smartphone market is likely to supply gas to SNPS' rocket.