Windows 8: The Brave And The Bold

The launch of a new Windows is not an ordinary event in the technology world. The Microsoft (MSFT) OS is still the most-used in the world, by a considerable margin. Therefore, any changes or updates have a global impact and significance. Windows 8 is even more significant in this regard. The company is shifting, for the first time, to a touch based interface as compared to its 'mouse' or 'touchpad' interface.

We have been bullish on Windows 8 for quite some time. According to recent company disclosures, it has already authorized more than a thousand devices, which will run on Windows 8/WP8. The company is trading at a P/E of 8x, which is approximately half the NASDAQ's 15x. Windows 8 has a huge advantage of an existing loyal user base; it remains to be seen if this loyalty is to 'Windows' or Windows 7 & XP. Microsoft has been very bold with its Windows upgrade, and we believe this boldness will pay off. With an excellent dividend yield of 3.26%, huge share buybacks and Windows 8 growth, MSFT is a buy.
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