Friday, July 19, 2013

Microsoft Wiffs on Earnings

What to do with Microsoft?  

MSFT is not quite a dividend machine but almost.  I am waiting to buy a new convertible clam shell/tablet when the battery life is at least five hours, the tablet weighs no more than an iPad and it runs everything like Quicken.  I think everyone else is waiting for the same product.  Therefore, I am not so upset by MSFT’s earnings miss.

Revenue did increase from $18 billion to $19 billion and you cannot turn around a battleship quickly.     I have Aug. $33 calls and Sept. $35 calls.  I expect the $35 calls to expire without action and maybe even the $33 calls.   I will decide what to do with those positions at that time.

I like to harvest profit and therefore, I will stop the remainder of my position at $31 for an eleven percent gain not counting dividends and covered call income.   If MSFT drops below $29, the yield plus covered call options could make me buy it back. 

Only you can decide what is best for you.