The first tranche of the buy-back ($20 billion) will be completed on August 17. The second half goes for the next five years. What this does is remove the "weak hands" from the market, and effectively puts a floor under the stock at close to today's price.

The May-June period was the first technical indication of a good entry point, but the Monthly Relative Strength Index (RSI) did not quite drop to the 30 level, so I held off.

But I like the reasonableness of UBS's 12-month target price of $33 for MSFT, and would not hesitate to buy the stock at $21.50 (current = $22.85) " if the RSI stars were all aligned at or below 30, which I would expect in a Bear market at some point.

Buying at $21.50 with a four quarter dividend of $0.36 and target of $33, would give me a total return of +55.2 pct. And, if I sold at $30 and picked up the four quarter dividends of nine cents each, my total return would be +41.2 pct.

Microsoft is a company many people (including me) love to hate. But most of us use the products and we are going to buy the upgrades etc, all of which have 40+ pct margins. So I really look at Microsoft (like Intel) like a bank. The cash flow just rolls in constantly.

Now Dell (NDQ: DELL) has warned this morning about economic softness, but we all knew that, didn't we? The bigger point I'd like to make is that the Internet, mobile devices, and vastly enhanced audio/video software capabilities will drive Microsoft forward at almost no credit or valuation risk.

I like the stock, but unlike UBS I don't like the company well enough to put it into the Cara 100.

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MSFT [GICS 45, Dow 30]
(MSFT: Yahoo Finance file)
(MSFT: StockChart chart)
(MSFT: Investertech chart)
(MSFT: ADVFN Financial Data)
(MSFT: ADVFN Financial Data)
(MSFT: Value Line Report May 26: next one is due Aug. 25)

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