Microsoft Corp. (Nasdaq:MSFT ) – bullish on fundamental, and speculative factors .
In the last three months, the stock gained $0.72, or 2.84 percent. In the last four quarters, the company's reported EPS either met or exceeded analysts' consensus estimates. For FY 12 (July), and FY 13, my EPS estimates are $2.75, and $3.05. Several analysts are reducing their earnings estimates, but I still rate this stock a strong buy.
Never expect fireworks from MSFT shares, as it is a well-managed stock. This stock brings much needed stability to a tech portfolio. It has huge piles of cash on its balance sheet that will make several banks look like pygmies. I think the company wants to retain enough cash so it has the strength to be able to take big risks even in the face of some economic uncertainty. Despite some people writing-off the ‘PC age', I think the company is well on its way to adapting to new realities. It is definitely a winning horse in the long run and a dark horse for Q4. The company is under pressure from investors to break the $26 to $30 per share range, and might well oblige them by making some expected as well as unexpected announcements.
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Apple Inc. (Nasdaq:AAPL) – downward revision in expectations, yet worthy of portfolio inclusion.
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We drastically reduce our estimates on AAPL. The revision follows from market correction and option chain indicators. Yet, I continue to include this stock in the portfolio. Following disappointing September quarter numbers, the stock is down nearly 10 percent from its 52-week high. Nevertheless, estimates for the nearby quarters look good.
Business fundamentals such as customer appeal, partner interest, and revenue expansion make me include this stock in the portfolio. The company has been making inroads into the enterprise smartphone market. I would like to reiterate what I said in my Q2 update, AAPL continues to be attractive as there is no clear rival that can topple it. However, we retract from our earlier stance that the stock could test $500 soon.
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. Moreover, over the last few months, the company has been actively engaging in M&A deals.