Microsoft (MSFT) Showing Signs Of Being A Momo Momentum Stock

Trade-Ideas LLC identified Microsoft (MSFT) as a momo momentum candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Microsoft

(

MSFT

) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Microsoft as such a stock due to the following factors:

  • MSFT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.1 billion.
  • MSFT has a PE ratio of 39.
  • MSFT is currently in the upper 30% of its 1-year range.
  • MSFT is in the upper 25% of its 20-day range.
  • MSFT is in the upper 35% of its 5-day range.
  • MSFT is currently trading above yesterday's high.
  • MSFT has experienced a gap between today's open and yesterday's close of 0.7%.

'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.

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More details on MSFT:

Microsoft Corporation, a technology company, develops, licenses, and supports software products, services, and devices worldwide. The stock currently has a dividend yield of 2.8%. MSFT has a PE ratio of 39. Currently there are 16 analysts that rate Microsoft a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for Microsoft has been 32.8 million shares per day over the past 30 days. Microsoft has a market cap of $403.9 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.05 and a short float of 0.5% with 0.99 days to cover. Shares are down 7.4% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Microsoft as a

buy

. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations, solid stock price performance, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • Net operating cash flow has increased to $10,669.00 million or 11.48% when compared to the same quarter last year. Despite an increase in cash flow, MICROSOFT CORP's cash flow growth rate is still lower than the industry average growth rate of 22.47%.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • MSFT's debt-to-equity ratio of 0.62 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 2.66 is very high and demonstrates very strong liquidity.
  • The gross profit margin for MICROSOFT CORP is currently very high, coming in at 70.70%. Regardless of MSFT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 18.29% trails the industry average.

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