Microsoft Corp (MSFT)

(A Top Pick March 6/12. Down 9.13%.) Was stopped out at $31.25.

(Top Pick Feb 15/12, Down 4.51%) Certainly they have lots of products. It’s an enterprise company and Windows 8 is driven by what happens in enterprise. The second half of this year you will see greater gains. The Surface is a great product. It is a working tool. Have lots of cash and made a lot of good acquisitions. Nice dividend and it is not expensive. Lots of downside protection.

Unloved and yet a great earnings growing company. Has grown its earnings by 44% since 2007. Very low valuation. 7X PE ex-cash is outrageously low.

Historically stocks like this don’t do very well at this time of year. As you get into the month of March, most of the technology stocks tend to come under some pressure. Preferred strategy is to take advantage of any kind of strength you might see in the next short period of time.

(Top Pick Mar 6/12, Down 9.23%)

Has not been a great stock for the last little while. Great cash flow yield of about 11%, but is not paying that out by dividend. Just can’t seem to get their act together in the mobile space. Under pressure as PCs have less and less share.

Has not been a good performer. Started buying in 2011 and has not done anything for clients except the dividend. So far seems to be people focusing on rumors or bad news. Windows 8 has not come out of the park. But he expects another year of record earnings and another dividend increase. Hold on and maybe buy more. The multiple is still too low.

For anyone running a value screen, it is at the top of the list. Phenomenal crash flow generation. Phenomenal cash holdings. Has some of the highest margins in the technology sector but the gross margin has been coming down. Have been able to offset it with some expense side but the question is still, how do you replace those revenues going forward.

Facing a big uphill battle. On the mobile front Google (GOOG-Q) and Apple (AAPL-Q) are winning. Their tablet has been a little bit of a flop so far. Windows 8 operating system has been a little bit slower than people had hoped. Very little financial risk. Have a great balance sheet and lots of cash and you will pick up a nice dividend but it is a laggard stock.

Technology sector in general tends to move between December and February so we are right in the midst of that. Chart looks like it has formed a bit of a triangle with descending highs but a flat base. Probably not a bad position but his discipline would be to Buy on a breakout.

It is probably going to continue what it has been doing since mid-2009. You aren’t going to get hurt here. A safer place to hide.

(A Top Pick Feb 15/12. Down 8.11%.) Too many people have expectations that Windows 8 is going to take off. It will at some point in time but because they are in the enterprise space, it takes a lot longer for these types of projects to happen. In the 2^nd or 3^rd quarter of this year, you’ll see more clarity on Windows 8, on the Surface Tablet and a lot of other things they are doing. Expect this is when the stock will move higher. You are getting a really reasonable dividend. Lots of cash and a great balance sheet.

The big question is where they are going to get the growth. With the hoopla of Windows 8 and how it was promoted, if that can’t get the company going, then what can? It is a value trap.

Doesn’t think highly of this company. Feels it is run by incompetent managers. Thinks they have a big problem on their hands. Computing went from desktop to laptop, which is not a problem as we still use the same software. But now computing is going from laptop to tablet and smart phone. This company essentially has no revenues in these 2 areas.

There are some risks with Windows 8 coming out and what they are doing on the phone side. Likes what they are doing in the tablet market. People like tablets but what they really miss are the applications that you can get on your PC. As Windows 8 rolls out and you get more into a format tablet, they have a chance to re-accelerate their growth a little bit.