Founded in 1975, Microsoft Corporation (NASDAQ: MSFT) carries a long tradition. The company serves as a leading software developer with a diverse product and service portfolio. It operates through five business segments, namely, Windows & Windows Live Division, Server & Tools, Microsoft Business Division, Online Services Division and Entertainments & Devices Division.
For 2011, Microsoft was at the top of the list with the 100 most profitable software companies in the world. Not without a reason.
Microsoft’s latest financial results reveal a solid net cash position. In addition, the firm’s year-to-date sales demonstrate a high market penetration for its products. Over the years, it has provided its shareholders with meaningful returns.
In 2010, Microsoft initiated a partnership with handset manufacturer Nokia Corporation (NYSE: NOKIA) in an effort to enter the smart phone market. Microsoft made a bold move by entering a business area, which is dominated by strong names, such as Google (NASDAQ: GOOG) and Apple (NASDAQ: AAPL). Google and Apple have a combined market share of about 90 percent. At the moment, Microsoft claims a 2 percent share and stands behind Research in Motion (NASDAQ: RIMM).
Nevertheless, Microsoft expects to gain from its recently launched Windows Phone 8 operational system. Nokia’s Lumia series, which operate Windows Phone 8 system, have topped the charts of preorders in Europe. In North America, the phones are expected to receive increased demand mainly due to their favorable prices. Based on analysts estimations, Microsoft’s operational system is projected to carry the second position in the global smart phone business by the end of 2015.
I personally support the notion that, in the tech word, adjustment is the key to success. Microsoft fully embraces this notion by focusing on the contemporary technological needs and seeking to contribute with reliable consumer solutions. There are even rumors going on about Microsoft making its own smart phone. If Microsoft does create its own handset, then I believe the competition within the industry will get even tougher than it already is.
Overall, Microsoft is considered to be an attractive investment. Out of 12 analysts tracked by Morningstar – a popular investing website – 8 recommend a “buy” rating. In addition, for 2013, Microsoft’s growth forecast suggests a year-over-year growth rate of 4.4 percent. At the moment, the stock is trading with comparably attractive metrics, which might indicate a value opportunity. I strongly suggest it is worth watching for upside trends as I expect it to perform strongly by posting rewarding returns.