The Seattle Times: Business & Technology: Microsoft stock is attracting bargain hunters "Microsoft, whose earnings growth and surging share price in the 1990s made Chairman Bill Gates the richest man in the world, is attracting the attention of investors who favor bargain-priced stocks.
"We've followed Microsoft for years, and we've never been able to buy it because of valuation," said John Buckingham, whose $260 million Al Frank Fund has outperformed 99 percent of value funds tracked by Bloomberg in the last five years. Last month, Buckingham bought 30,000 shares of the world's biggest software maker.
The purchase by Buckingham and interest from other "value investors," who buy stocks that they view as cheap relative to earnings, sales or asset values, indicates a four-year slump in Microsoft's stock may come to an end.
Microsoft has been selling for about 24 times earnings for the past year, 41 percent below its average ratio of 41 during the past decade. After returning an average of 72 percent a year from 1995 through 1999, the Redmond company's shares have lost an average of 17 percent annually since the end of 1999."