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

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 $1.5 billion.
  • MSFT has a PE ratio of 36.
  • 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 1.1%.

'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 2.7%. MSFT has a PE ratio of 36. Currently there are 14 analysts that rate Microsoft a buy, 1 analyst rates it a sell, and 6 rate it a hold.

The average volume for Microsoft has been 34.9 million shares per day over the past 30 days. Microsoft has a market cap of $428.9 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.07 and a short float of 0.7% with 1.96 days to cover. Shares are up 15.6% year-to-date as of the close of trading on Wednesday.

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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 solid stock price performance, increase in net income, reasonable valuation levels, expanding profit margins and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:

  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. 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.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Software industry average. The net income increased by 1.8% when compared to the same quarter one year prior, going from $4,540.00 million to $4,620.00 million.
  • The gross profit margin for MICROSOFT CORP is currently very high, coming in at 71.80%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 22.67% is above that of the industry average.
  • Net operating cash flow has slightly increased to $8,594.00 million or 2.87% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -8.93%.

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