You don’t have to be a Vista booster or be entirely happy with Microsoft’s Facebook adventures to want to own Microsoft. The company is benefiting from a product cycle, as well as from tailwinds in the business market, and neither should be denied.
There’s more to the pro-Microsoft case though. The company is also benefiting from fairly severe underownership among growth managers. Here’s Goldman Sachs on the subject this morning:
Also notable is that growth funds remain significantly underweight Microsoft despite it being one of the largest constituents of their comparable indices. Lipper Large-Cap Growth Funds (about $260 billion of equity holdings) currently hold 1.32% of their portfolio in Microsoft shares, a significant 173 basis points underweight. This underweighting has decreased from 210 basis points underweight in July. Microsoft makes up 3.05% of the Russell 1000 growth index. This combined with sentiment that is still overwhelmingly negative provides an interesting set-up into earnings.