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Microsoft: What to Do with Tech Heavyweight?

Thursday, 24 Jan 2013 | 2:40 PM ET
Microsoft: Value Trade or Value Trap?
With Microsoft releasing earnings after the bell on Thursday, top traders Stephanie Link and Stephen Weiss debate whether this stock is a big value or just a big value trap.

If you've been holding Microsoft for the past 3 months, you may as well have kept that money under your mattress.

Over the past 90 days or so the stock has moved about 0%. Over the same period the S&P had advanced about 5%. Apple however had declined 25%.

What should you do with this tech heavyweight?

Top trade Stephanie Link, director of research at TheStreet, is bullish.

She thinks at 8.8 times earnings Microsoft is a value. "It's just a cheap stock," she said.

Link sees plenty of catalysts to drive gains. "They have a strong enterprise business and they're making aggressive moves in entertainment," she said. Also the company has done a great job of returning cash to shareholders.

Although there are broad concerns about the PC product cycle, Link believes that's already baked in.

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Trader Jon Najarian, co-founder of OptionMonster is equally enthusiastic. He believes Microsoft has upside if only for their mobile strategy. "They're going the right way," he said on Halftime. "I like it."

Microsoft unveils its new logo.
Source: Microsoft
Microsoft unveils its new logo.

Trader Stephen Weiss, managing partner at Short Hills Capital, just can't get on board.

He concedes that Microsoft is a safe stock and it generates a decent yield, but ultimately he thinks there are better places to put money to work. "In tech, I want growth.

I'd rather play a stock that's more expensive but is a better growth story," he said

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Trader disclosure: On January 24,2013, the following stocks and commodities mentioned or intended to bementioned on CNBC's "Fast Money" were owned by the "FastMoney" traders; Stephen Weiss is long RIMM; Stephen Weiss is long TBF; Stephen Weiss is longAAPL; Stephen Weiss is long SCCO; Stephen Weiss is long QCOM; Joe Terranova is long VRTS; JoeTerranova is long AAPL; Joe Terranova is long GS; Joe Terranova is long AXP;Joe Terranova is long MS; Joe Terranova is long GLW; Joe Terranova is longDELL; Joe Terranova is long SWN; Joe Terranova is long XOM; Joe Terranova islong RIMM $17 PUTS; Joe Terranova is long AAPL $460 PUTS; Jon Najarian is long RIMM CALLS;Jon Najarian is long GOOG CALLS; Jon Najarian is long PAY; Jon Najarian isshort PAY Calls; Jon Najarian is long NVDA CALLS; Jon Najarian is long DNDNCALLS; Jon Najarian is long UAL; Jon Najarian is long DAL; Stephanie Link is long AAPL;Stephanie Link is long GS; Stephanie Link is long WFC; Stephanie Link is longCSCO; Stephanie Link is long SBUX; Stephanie Link is long BRCM

For Steve Milunovich
This company/entity is, or within the past 12 months has been, a client of UBSSecurities LLC, and non-securities services are being, or have been, provided:AAPL
Within the past 12 months, UBS Securities LLC has received compensation forproducts and services other than investment banking services from thiscompany/entity: AAPL
UBS AG, its affiliates or subsidiaries beneficially owned 1% or more of a classof this company`s common equity securities as of last month`s end (or the priormonth`s end if this report is dated less than 10 days after the most recentmonth`s end): AAPL
UBS Securities LLC makes a market in the securities and/or ADRs of thiscompany: AAPL
UBS AG, its affiliates or subsidiaries held other significant financialinterests in this company/entity as of last month`s end (or the prior month`send if this report is dated less than 10 working days after the most recentmonth`s end): AAPL

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