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Hedge Fund Trade Of The Week: Microsoft

Microsoft is the Hedge Fund Trade of the Week, said Anthony Scaramucci of Skybridge Capital and author of "Goodbye Gordon Gekko."

The Redmond, Wash.-based company is trading at 10.6 times earnings, Scaramucci said. The stock went out at roughly $25 a share Tuesday. They have $4.25 in cash. If you bag out the cash, this is a "very cheap" stock, he said. It is 8.6 times earnings net of cash.

In addition, the tech giant has a new product cycle with Office 2010 and Windows 7. The company is raising dividends and buying back shares, Scaramucci noted.

There are two scenarios for this tech name, said Scaramucci:

  1. The stock stays "boring," like a tech utility. It would increase dividends and buy back shares.
  2. It could use its $36 billion in cash to execute strategic acquisitions.

Anthony Scaramucci runs SkyBridge Capital, a leading alternative asset manager with more than $7 billion under management. Every week on Fast Money, Scaramucci, aka 'The Hedge', takes you behind the hedges, giving you an unprecedented look at the names getting the most chatter amongst the hedge fund community.


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Trader disclosures for Tuesday, Aug. 17, 2010:

Joe Terranova
Terranova owns (AKAM)
Terranova owns (V)
Terranova owns (NRG)
Terranova owns (POT)
Terranova owns (OXY)
Terranova owns (GLD)
Terranova owns (BAX)
Terranova owns (MOS)
Terranova owns (PFE)
Terranova owns (SU)
Terranova owns (XBI)
Terranova owns (GOOG)
Terranova owns (LRCX)
Terranova owns (AXP)
Terranova owns (C)
Terranova owns (GS)
Terranova owns (BMO)
Terranova owns (MSFT)
Terranova owns (QCOM)
Terranova owns (FCX)
Terranova owns (APA)
Terranova owns (GLD) Calls
Terranova is chief market strategist of Virtus Investment Partners, LTD.

Virtus Investment Partners own more than 1% of (ABAX)
Virtus Investment Partners own more than 1% of (ALK)
Virtus Investment Partners own more than 1% of (AMKR)
Virtus Investment Partners own more than 1% of (CASS)
Virtus Investment Partners own more than 1% of (CSVI)
Virtus Investment Partners own more than 1% of (XLY)
Virtus Investment Partners own more than 1% of (XLP)
Virtus Investment Partners own more than 1% of (DRYS)
Virtus Investment Partners own more than 1% of (EXR)
Virtus Investment Partners own more than 1% of (XLI)
Virtus Investment Partners own more than 1% of (IGE)
Virtus Investment Partners own more than 1% of (LDR)
Virtus Investment Partners own more than 1% of (LPHI)
Virtus Investment Partners own more than 1% of (XLB)
Virtus Investment Partners own more than 1% of (MGRC)
Virtus Investment Partners own more than 1% of (NRCI)
Virtus Investment Partners own more than 1% of (DBV)
Virtus Investment Partners own more than 1% of (SUBK)
Virtus Investment Partners own more than 1% of (XLK)
Virtus Investment Partners own more than 1% of (XLU)
Virtus Investment Partners own more than 1% of (WDFC)
Virtus Investment Partners own more than 1% of (YDNT)

Guy Adami
Adami owns (AGU)
Adami owns (BTU)
Adami owns (NUE)
Adami owns (C)
Adami owns (GS)
Adami owns (INTC)
Adami owns (MSFT)
Adami’s wife works at Merck

Karen Finerman
Finerman’s firm owns (AAPL)
Finerman’s firm is short (ANF)
Finerman’s firm owns (ARG) calls
Finerman’s firm owns (BBY)
Finerman’s firm owns (GENZ) options
Finerman owns (GOOG)
Finerman’s firm owns (JCG)
Finerman and Finerman’s firm owns (JPM)
Finerman’s firm owns (RIMM)
Finerman’s firm owns (TJX)
Finerman’s firm owns (WMT)
Finerman's firm is short (IJR)
Finerman's firm is short (MDY)
Finerman's firm is short (SPY)
Finerman's firm is short (IWM)
Finerman’s firm owns S&P 500 puts
Finerman’s firm owns Russell 2000 puts

Gary Kaminsky
***No Disclosures***

Patty Edwards
Edwards owns (AMZN) for clients
Edwards owns (C) for clients
Edwards owns (CSCO) for clients
Edwards owns (F) for clients
Edwards owns (GE) for clients
Edwards owns (GLD) for clients
Edwards owns (GOOG) for clients
Edwards owns (HD) for clients
Edwards owns (JCG) for clients
Edwards owns (MSFT) for clients
Edwards owns (PFE) for clients
Edwards owns (TTM) for clients
Edwards owns (WMT) for clients
Edwards owns (YHOO) for clients
Edwards owns (TM)

Tim Seymour
Seymour owns (POT)

Barry Ritholtz
Funds managed by Ritholtz own (PCS)
Funds managed by Ritholtz own (QID)
Funds managed by Ritholtz own (TLAB)
Funds managed by Ritholtz own (SBGI)

Anthony Scaramucci
Scaramucci and SkyBridge Capital are long (MSFT)

Colin Gillis
***No Disclosures***

Stephen Weiss
***No Disclosures***

Scott Nations
***No Disclosures***