Trade-Ideas: Microsoft (MSFT) Is Today's Pre-Market Laggard Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Microsoft ( MSFT) as a pre-market laggard 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 $920.8 million.
  • MSFT traded 137,121 shares today in the pre-market hours as of 9:28 AM.
  • MSFT is down 2.2% today from yesterday's close.

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More details on MSFT:

Microsoft Corporation develops, licenses, markets, and supports software, services, and devices worldwide. The company's Devices and Consumer (D&C) Licensing segment licenses Windows operating system and related software; Microsoft Office for consumers; and Windows Phone operating system. The stock currently has a dividend yield of 2.5%. MSFT has a PE ratio of 17.3. Currently there are 8 analysts that rate Microsoft a buy, no analysts rate it a sell, and 11 rate it a hold.

The average volume for Microsoft has been 28.1 million shares per day over the past 30 days. Microsoft has a market cap of $374.3 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 0.75 and a short float of 1% with 4.13 days to cover. Shares are up 21.4% year-to-date as of the close of trading on Friday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

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

Highlights from the ratings report include:
  • MSFT's revenue growth has slightly outpaced the industry average of 11.5%. Since the same quarter one year prior, revenues rose by 15.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • MSFT's debt-to-equity ratio is very low at 0.25 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, MSFT has a quick ratio of 2.31, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Compared to its closing price of one year ago, MSFT's share price has jumped by 35.91%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, MSFT should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Net operating cash flow has significantly increased by 61.17% to $9,514.00 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 41.51%.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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