The economic crisis has hurt the stock market a lot. As stocks can go to unrealistic heights, stocks can also go to unrealistic bottoms. Price/Earning is the indicator, and if shareholders keep selling and selling, the price per share goes down. That does not necessarily mean that the company is making less money – which is the other factor in calculating Price/Earning.
MSN Money Central has the Top Stock MoneyBlog. Here Andrew Horowitz gives us his thoughts on companies that has hit an unrealistic bottom. Among them are Microsoft:
One of my favorite positions right now is Microsoft. With a $40 billion share buyback program and an 18% increase in its dividend, Microsoft seems well poised to provide a substantial increase to shareholder value. Whether or not they enter into a transaction with Yahoo! will remain to be seen, but either way there appears to be a wonderful opportunity at these share prices. Last week we entered a position for our Strategy Lab portfolio and would consider increasing the position as analysts are looking for $.41 per share, a 30% increase over the year ago period. Finally, after several missed attempts at a world-class marketing plan, the company has finally found what could be one of the best awareness campaigns with the, "I am a PC" tagline. Needless to say, I am a PC too and I am a buyer.