by David Kranzler
Investment Research Dynamics
I will say right off the bat that Microsoft’s stock is now one of my favorite short-sell candidates. This is the 2000 tech bubble on steroids. MSFT itself is extremely overvalued given that its revenues are down over 7% on a trailing twelve month basis compared to its FY 2015 ended June 30th. Its net income is down 16% on the same comparison basis. MSFT itself trades at a 38x trailing p/e with declining revenues and income. It trades at 4.7x sales and 5.4x book value.
It’s been issuing debt like the U.S. Government in order to buy back shares, with its debt load increasing nearly 50% since September, from $27 billion to over $40 billion. Since June 2013, MSFT’s debt load is up 333% (from $12 billion).