Microsoft (MSFT) is a tech giant with one of the most recognizable names in the world and almost $88 billion in cash and investments. And while the post-PC age is weighing on growth, the sales are still rolling in.
However, MSFT just sold off sharply after earnings thanks to a $900 million charge related to Surface tablet inventory adjustments and a big miss on profits. And with continued headwinds in mobile and the decline of its Windows empire, this trend is going to continue for some time.
But somehow the tech giant is up more than 19% year-to-date in 2013 — and that has many thinking that Microsoft is stable, or even that it could be a bargain right now after the pull-back.
Don’t believe it. The price-to-earnings ratio is much more reasonable than other picks on this list, but the risk of disruption and falling behind is severe. Microsoft is squeezing as much as it can from Windows and its Office software, but mobile trends and competition are clearly working against this stock.