|MSFT 50DMA/200DMA Cross|
So does MSFT at 12.6x and 9.64x 2011 earnings mean it's a cheap stock? The low ratio could be forecasting lower earnings going forward, which would normalize the ratio. Or everything could go as planned, 2010 earnings hit 2.03/share (S&P estimate), price fills the multiple and starts to price in 2011. I used to screen for undervalued small caps relative to earnings, book, sales, competitors and historical averages and chart out valuation ratios and financial trends to find potential opportunities. Technicals are then used for confirmation. I hope to post this type of info once the slow down or double dip ends.
Like I said earlier, MSFT needs to find support at $24 (mid 2009 highs) or base out at some point to provide support. With the death cross in tact, the 50 and 200 day moving average could act as tough resistance going forward. $QQQQ (tech index), which I'll chart out next with other indexes, is sitting right on its 200DMA in a symmetrical triangle...!!!!!
MSFT (Microsoft Corp) - FreeStockCharts.com