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Barchart
Barchart
Mark R. Hake, CFA

FORGOTTEN HISTORY: Shorting microsoft puts looks very attractive to value investors in msft stock - The Untold Story

I recently described in a Barchart article why Microsoft Corp (MSFT) stock looks cheap here, despite the market's concerns about its free cash flow (FCF). My price target is $521, or 23% higher over the next year. One play for value investors is to sell short at-the-money and out-of-the-money put options with one-month expiration periods.

MSFT is down today at $424.53 per share, well off its recent Jan. 28 peak of $481.63, before its market close release of fiscal Q2 earnings on the same day. This is a near-12 % decline over several days that seems overdone.

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