Microsoft Corporation (MSFT) remains exposed to areas of growth within technology despite the near-term, temporary decline in the PC market, with mobile, enterprise and gaming showing some growth prospects for this technology giant, says Rafael Resendes, Managing Director at Toreador Research And Trading.
“I think our third largest position in the fund at the moment is in Microsoft,” Resendes said. “We see everybody is focusing on the news that the PC market is shrinking, and certainly that’s true, but it tends to be concentrated in the area of the PC market that has been least profitable, the netbook space, which are essentially poorly designed products.”
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Resendes says the PC market will bounce back to stay roughly intact in the longer term, and MSFT‘s exposure to growing areas give the company opportunities and upside potential. He mentions the company’s Xbox, the cloud computing exposure and the enterprise as growing areas for the company.
“We are buying Microsoft for zero growth, and to the extent that they and Intel (INTC) are able to come up with a Windows Mobile platform or a form factor, which we think has a very high chance of happening this year or early next year, then all of a sudden we are looking at a position where, in addition to obtaining a nice dividend that’s well-covered, we have a stock that generates significant and attractive upside,” Resendes said.
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