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Microsoft Corporation (MSFT): Scott Kessler Says Dollar Impact A Bit Of An Excuse

In its latest quarterly report, Microsoft Corporation (NASDAQ:MSFT) stressed to analysts and investors that it took a hit from foreign exchange headwinds because of the stronger dollar. Is this a legitimate reason or is the technology giant making an excuse?

According to Scott Kessler of S&P Capital IQ in an interview with David Asman on Fox Business Network, it is a bit of both for Microsoft Corporation (NASDAQ:MSFT).

“You know, I think it’s a little bit of both. When you think about a lot of this large cap tech companies, they generate at least half of their revenues – and generally, in some cases, even more profit – from overseas. That’s largely because overseas revenues are packed at a lower rate and this has come up time and time again over the last couple of years. When you consider the fact that the dollar has appreciated so substantially against the Euro and other currencies, it is an understandable aspect to what companies are telling us. But, in addition, to us, it also seems to some extent like an excuse,” Kessler tells Asman.

What Microsoft Corporation (NASDAQ:MSFT) has going for it at the moment, however, is that the company has a lot of cash, as Asman notes. Kessler agrees.

“That is absolutely something – especially when we think about Microsoft – that is particularly important. It is not only important to us in assessing the position of the company as well as the valuation and prospects of the stock but also thinking about its perception on Wall Street and to what extent they are being thought of as shareholder-oriented and shareholder-focused,” Kessler explains.

According to the analyst, after the day of Microsoft Corporation (NASDAQ:MSFT)’s results, the company was paying an indicated dividend of 2.9%. What this means, the analyst notes, is that investors are paid to wait for better times going forward even if the performance of the company was just okay in the latest quarter.

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Joel Greenblatt’s Gotham Asset Management increased its stake in Microsoft Corporation (NASDAQ:MSFT) by a whopping 5,202% increase quarter over quarter to 836,500 by the end of the last quarter of last year.

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