Microsoft screams value. Its fiscal 2012 price-to-earnings ratio is 9.5x and its enterprise value to EBITDA multiple is 5.8x. Further, it is projected to generate $3.50 of cash flow per share for a cash flow yield of 13%. Add on the now 3% dividend yield and the company is cheap, plain and simple. Wall Street analysts are projecting fiscal 2012 EPS of $2.855 growing 10% to $3.134 in fiscal 2013.
Between the addition of Skype, the continuing Windows 7 conversion, the positive developer response to Windows 8 and its potential to be a credible competitor in the tablet operating system space, Office 365, the potential of the Nokia smart phone relationship, and the incredibly inexpensive financial metrics, Microsoft could be poised for a step function up in stock price.
Disclosure: I am long MSFT.