Microsoft ‘a modest growth business’: Pro

Improved capital allocation and growth of its existing businesses will lead Microsoft shares higher following the departure of CEO Steve Ballmer, Ariel Investments Vice Chairman Charles Bobrinskoy said Friday.

"This was a value stock in which people really didn't like how the company was being run, but the stock was incredibly cheap. "And so people think that he's been a bad allocator of capital. We would probably agree with that."

Balmer, who succeeded Bill Gates as CEO in 2000, announced that he planned to leave his post within the next 12 months, sending the stock higher.

(Read more: Microsoft CEO Ballmer to step down within 12 months)

Shares of Microsoft closed at $34.75, up 7.29 percent.

On CNBC's "Fast Money," Bobrinskoy said that the next chief executive of Microsoft would likely have one strong skill.

"We think they're going to bring in somebody with capital allocation skills," he said. "Think IBM. Think how well IBM has done over the last three years because they've done so well with capital allocation."

Bobrinskoy, whose Ariel Focus Fund holds Microsoft as its largest position, chided the company for its $8 billion acquisition of Skype and called the investment in online search engine Bing "kind of wasteful."

The return of Bill Gates, he added, wasn't likely.

"This is not a broken company. If this was a broken company, he might come back. But it's not that messed up," Bobrinskoy said.

The stock, he added, was still attractive.

"We still think it's very cheap. There's $72 billion of cash on the books at Miscrosoft. It's less than 10 times earnings when you take away that cash," Bobrinskoy said.

(Read more: Who'll succeed Steve Ballmer at Microsoft?)

"If you start allocating cash properly, this is a growth business – not 15 percrent growth but mid to high single-digits business that should be trading at 12, 13 times earnings. So, there's still a lot of room to run."

Much of that growth, despite a tough second quarter, would come from PC growth around the world, from Microsoft's $10 billion Xbox business and cloud-computing services.

(Read more: Top stocks with 5 percent growth: Pro)

"We actually think this is a modest growth business," he added.

By CNBC's Bruno J. Navarro. Follow him on Twitter @Bruno_J_Navarro.

— CNBC's Courtney Gartman contributed research to this report.

Trader disclosure: On Aug. 23, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Steve Grasso is long BA; Steve Grasso is long BAC; Steve Grasso is long BBRY; Steve Grasso is long GDX; Steve Grasso is long GOOG; Steve Grasso is long HERO; Steve Grasso is long HPQ; Steve Grasso is long MHY; Steve Grasso is long LNG; Steve Grasso is long MJNA; Steve Grasso is long NVIV; Steve Grasso is long PFE; Steve Grasso is long QCOM; Steve Grasso is long S; Steve Grasso is long ASTM; Steve Grasso is long POT; Steve Grasso is long DECK; Steve Grasso is long DHI; Brian Kelly is long EURO ; Brian Kelly is long OIL; Brian Kelly is long AUSSIE DOLLAR; Brian Kelly is short US DOLLAR; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long MSFT; Guy Adami is long AGC; Guy Adami is long NUE; Guy Adami is long BTU; Tim Seymour is long BAC; Tim Seymour is long CLF; Tim Seymour is long F; Tim Seymour is long GM.