Microsoft PE=16, forward PE=13!


Wow.    As Yahoo rebuffs them and Microsoft shares continue to take a beating from  what appears to be Yahoo aquisition unhappiness, the PE of this mega company is looking nothing short of spectacular.    Some would argue that Microsoft is slowly dying due to the massive changes in the way people and businesses use software, but it’s foolish to think Microsoft’s prospects are dim under the current conditions.   In my view they are simply making too much money, and remain a key player in a key industry, to deserve this low market valuation.  

If the Yahoo merger happens the PE at MSFT will take a hit, but it would clearly remain well under 20, a very modest PE for a company that still has significant growth potential.

But, I guess like other investors I’m a herd animal and fearful, so I won’t be buying MSFT….quite yet.

Disclosure:  Long on Yahoo, no Microsoft position.

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About JoeDuck

Internet Travel Guy, Father of 2, small town Oregon life. BS Botany from UW Madison Wisconsin, MS Social Sciences from Southern Oregon. Top interests outside of my family's well being are: Internet Technology, Online Travel, Globalization, China, Table Tennis, Real Estate, The Singularity.
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One Response to Microsoft PE=16, forward PE=13!

  1. John Magnus says:

    Hi 🙂 Just wanted to share something with you. English isn’t my primary language, finance/investments isn’t remotely my line of work; PE doesn’t mean that much to me. A fun game this resulted in; Pick the meaning from Wikipedia’s list [ http://en.wikipedia.org/wiki/PE ]. Although I figure it makes sense going with “P/E ratio”, several other meanings made really entertaining reading.

    Regardless; Why not simply go with PE when writing posts like this? Sure would help me spend less time reading your posts… 😉

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