Microsoft (NASDAQ:MSFT) — “Mr. Softee” may finally be coming out of an 11-year slump. The stock hit a five-year high Thursday, as primarily institutional investors appear to be placing a high value on future growth. Outstanding growth in its video game business, a large stake in “the cloud,” stable cash flow, a regular stock buyback program, and a 2.8% dividend yield add up to higher earnings and share price.
Recently reported fiscal Q3 2013 earnings came in at $0.72 per share versus expectations of $0.68, up from $0.60 in the year-earlier period. Earnings per share (EPS) for fiscal year (FY) 2013, ending in June, are expected to be $2.68, while $3.09 is estimated for FY 2014 and $3.37 for FY 2015.
Early in April, MSFT broke through its long-term bearish resistance line with a high-volume breakaway gap. Since then, it has been under heavy accumulation.
The trading objective is $38, which could be met within days. Longer-term investors could pocket a sizable return from this software powerhouse.