) may soon have a new CEO to replace Steve Ballmer, who has
announced his retirement.
Reports late last week said the new holder of the top job will
be insider Satya Nadella. That disappointed some analysts, who
were hoping an outsider would shake up the former software leader
and revive innovation. But the stock rose 2.6% Friday in big
volume as the speculation was digested.
Nadella, a native of India, has been with Microsoft since 1992
and currently heads the company's cloud and enterprise group.
Microsoft has watched its PC and Windows Office businesses
erode as users shift to cloud computing and mobile devices.
The company is also set to acquire the handset business from
Nokia sometime this quarter.
Microsoft was a monster growth stock in the 1990s as the world
shifted to the PC. But since 2000, the stock has gone no
Earnings growth has flatlined. EPS in fiscal 2013 ended in
June was $2.72, identical to 2012. Analysts are forecasting a 1%
decline in 2014 and an 8% increase in 2015.
Five-year annualized earnings growth is 11%. If growth has
been slow, at least it's been steady. The five-year Earnings
Stability Factor is 8 on a 0 to 99 scale with low numbers
corresponding to stable earnings growth.
In the most recent quarter, EPS rose 3%, and analysts are
forecasting a 20% decline in the next report.
The company has paid quarterly dividends since 2004, when it
started paying 8 cents a share. It's now up to 28 cents, which
works out to an annual yield of 3%.
The stock has fashioned a double-bottom base with a 37.72 buy
point. It broke above that Friday on volume 133% above
It fell below the buy point Monday amid a general market
sell-off. It closed at 36.48 Monday, down 1.36.