Tony Li

Background Business software and services

company in the technology sector founded in 1975

Largest software maker by revenue and one of the world’s most valuable companies at $258B

Develop, manufacture, license, support, and sell software and electronics; also provide consulting services

Divisions: Windows (operating system, Office suite, web applications), tablets (Surface RT and Pro), computer accessories, server and tools software, commercial licenses, online services (Skype), entertainment (XBox), and smartphones

Steve Ballmer Strong performance in Windows OS, Office,

data centers, entertainment, and business enterprise until 2012 with the weak tablet and phone numbers.

Increased annual revenue from $25 B to $70 B with a gross profit of 75 cents on each dollar in sales.

Good profits from maintaining services but lack of innovation to explore new fields.

Satya Nadella New CEO of Microsoft as of February 4,

2014 Former Executive VP of Cloud and

Enterprise Vision of seeing Microsoft moving into

the mobile and cloud industry Expectations to innovate Microsoft for

the consumers and connect devices through different platforms

Fundamental Analysis Beta 0.69 indicates stability and moderate returns P/E 17.97 is near the industry average EPS 2.55 indicate profitability Dividend $1.24 (2.70%)

Technical Analysis

Competitors Google- Chrome OS, Google Docs, Chrome

browser, Android, phones and tablets, Google Play Apple- Mac OS, iPhones and tablets, software,

cloud storage Oracle- consulting, mobile computing and

database software, business operating system Linux- operating system OpenOffice- productivity suite

Future Outlook Potential to grow as it develops its cloud,

entertainment, and mobile services Recently beat Wall Street analyst expectations

on Friday on reporting. Stock went up 4% Strong commercial cloud business grew 128%,

more XBOX (102%) and tablet sales doubled Cut costs with employee layoffs of 13,000 to

restructure - margins expected to improve Windows 10 in mid 2015

Investment Strategy Blue chip company with strong history

and new innovative CEO Buy the stock and hold on for dividends

and value to go up Options strategy

Married Put (bullish but want to protect against losses)

Butterfly Spread (combine bull and bear with 3 different strike prices)