Analysis of Microsoft Inc. Stock
Assignment 1
Analysis of Microsoft Inc. Stock
Submitted by: Danish Faheem
Submitted to: Upinder Bajwa
Submitted on: November 19, 2012
Fundamental Analysis
Economic Variables Affecting the Industry
Quantitative easing the Federal Reserve recently announced another round of quantitative easing (Thompson Reuters, 2012). It might not have a direct effect on the IT industry, but it might raise the prices of precious metals that are used to make many of the computer components causing increase in computer related technology.
Drop in unemployment rate – this signifies that the economy in us might be starting to pick up. (Thompson Reuters, 2012) It is a great sign before the holiday season since people might have more funds to buy electronics and other gifts for their relatives.
Wholesale inventories up – Wholesalers have higher inventories but also posted a gain in sales (Thompson Reuters, 2012). Once again this shows that the economy is starting to pick up, the more money people have the more they will spend on consumer electronics such as Smartphones, which is a growing industry.
About the company
Microsoft operates in three different industries; computer software, online services and video games. Since the sell various products to business as well as consumers, Microsoft core products can be classified under IT. Most of the revenue for Microsoft is derived through computer software such as Windows and Office Suite. The IT sector is a defensive industry since many companies tend to upgrade their equipment and software when economy is in a downturn in order to take advantage of low interest credit.
About the Stock
Microsoft is a consumer electronics and computer software developer. They sell many products ranging from the popular windows operating system to Xbox 360. A blue chip stock, Microsoft is listed on Nasdaq under the trading name MSFT. The management consists of board of director and senior leaders; the senior leaders manage the different divisions within Microsoft such as Office, Windows, Xbox and online services. The board of directors consists of 11 people including CEO Steve Ballmer, Chairman Bill Gates, the founders of Microsoft. The majority of Microsoft shares are held by financial institutions and mutual funds, together they hold 65% of Microsoft shares. However the top 3 largest shareholders are Bill Gates with 461 million shares, Steve Ballmer with 333 million shares and The Vanguard Group with 330 million shares.
In comparison to