Microsoft stock may be worth watching
Reuters | at | by Mike
Pension and mutual funds should keep a close eye on the shares of Microsoft, according to a weekend Barron's article that noted the world's No. 1 software maker makes up 3.4 percent of the benchmark Standard & Poor's 500 index. If the stock prices changes $10, the overall market value changes $107 billion, and the S&P 500 index moves 1.4 percent, Barron's reported.
Yet the newspaper also said that while the software maker's gross revenues increased 12 percent to $28 billion in its fiscal year ended June 2002, and net income was up 6.5 percent to $7.8 billion, it may not be enough to merit the stock's price/earnings ratio of 33 -- three times its revenue growth rate and five times its earnings growth rate.