Before we start discussing the Microsoft case here is a teaser for you.

You have started a hotdog outlet with 5 of your friends in a remote area and it is at present just generating $100 a profit every day which you shares equally with your friends.

For you it is a decent return on initial investment $2000 you invested in the beginning.

One day one of your friends come and declares that he is willing to buy share if any of you is willing to sell and set the price range of 1800 to 2100. The lowest bid will be accepted first.

What will be the first thoughts on your mind?

- Why he wants to increase his share in the company.
- Is there are opportunities which I can’t see.
- Next will be what will be the future of the Hotdog selling business.

The same mechanism is at work in Microsoft buyback of shares worth $20 billion through Dutch auction starting from July 21st to August 17th.

The price range of proposed dutch auction is $22.50 and $24.75

There are two mechanisms at work here –

First Microsoft wants to give the least possible amount to its share holders and it is for the shareholders to decide how they perceive company’s future.

Suppose the company is willing to buyback 1000 shares in the market and it received bids for 100000 shares. The break-up of 100,000 shares is as follows

A $ 22.50 - 100 shares

B $ 23 - 700 shares

C $ 23.25 - 200 shares

D $ 23.50 - 10000 shares

E $ 24 - 89000 shares

The Microsoft will just pay $22.50 for 100 shares, $23 for another 700 shares and finally $23.25 for the last 200 shares it wants to purchase. The people who want to sell at $23.50 won’t able to sell any of their shares.

Secondly by buying back shares from open market, the management is increasing the worth of remaining stockholders holding (jargon) in the company, more often than not it ended up increasing promoters holding in the company as they control the decision making at the highest level and have better information about future prospects of the business.

What will happen to Microsoft share at Wall Street?

Historically once the company starts buying back, the prices of the shares rises as investors believe that the company has something in tank.

Personally I believe that the range is on the lower side as Microsoft share is already been traded at $24 (1st August, 2006) and shareholders have a very low incentive to sell their holding in the company.

Looking in terms of return buyback will increase the earning per share (EPS) and enable the investors a higher return than the present range of $0.26 to $0.37.

The good thing the buy back will do to Microsoft shares is that it will increase the support price of the shares in open market. As per the historical trends and technical charts – that data is less relevant in the present case as none of the companies before had that much strength as Microsoft does now.

Finally the to my mind the real gainers of this buy back will be the one who won’t sell their stocks as technically tech stocks are bottomed out after the thrashing they received since April this year. Secondly Microsoft will be launching its next version of operating system – Vistas early next year so that will help in boosting the bottom line.

Boris Mann did his Master’s in finance. He regularly advises clients on personal finance issues. He is a contributing writer on Financial issues for Write Term Papers .com. You can contact him for college term papers and other financial queries at Write Term Paper .com.

Coming off its 52 week high and its recently reported earnings (August 7, 2006), Cytrogen Corporation may be one of the best buys you can find out there. The company recently posted excellent fundamentals with a 0.32 EPS when the market was expecting -0.30, and increased both its revenue and profit relative to one year ago.

For the most part, a lot of the extra income had come from Cytrogen’s joint venture with PSMA Corporations, but such an activity does not mean that CYTO is not a perfect buying opportunity. While a few investors may argue that the stock was recently near two dollars which exceeded its previous 52 week low, CYTO is continuously growing and still presents itself as a chance for a profitable mid to long term investment.

As a biopharmaceutical company, such a sector usually does well during periods of slow economic growth. As interest rates are at near its maximum, economic growth will become a bit of concern but should ironically help CYTO’s price. Typically, during slow growth inelastic goods and services produced by companies such as in healthcare tend to do well because the decrease in income help consumers allocate more of their assets into these inelastic companies. Such distribution aids in future earnings and revenue growth, and CYTO is no exception to such a trend.

With excellent fundamentals, and optimistic outlook, and price just coming out of its 52 week low, I would look for CYTO to be a real bargain around the 2.30-2.50 mark. Having a 52 week high of near 5.30, a 17.00 one year target, and positive, but relatively not to high P/E ratio this quarter, I would absolutely recommend Cytrogen as a strong buy.

Dennis Biray presents advice on all kinds of topics ranging from finance and investing to fitness to sports. For more information email him at dbiray@gmail.com, or to view other articles written by him visit http://www.biraynetworks.co.nr/.

With earnings reports on the horizon and a tremendous amount of uncertainties surrounding corporate officials, you must think that I am crazy to think that Brocade Communication Systems Inc. is a strong buy. However, if you look closely at both the fundamental and technical aspects, you will see there is a great opportunity for profit in this company.

As an equity competent in dealings with data storage and networking, you might also want to argue that as a technology stock there is not much potential for high growth in terms of price advance. While such a trend may hold some relevance, in the case for Brocade (BRCD), the company is already at a low price relative to what it should be at. Near the 52 week low relative to its high, BRCD stumbled a few days ago after purchasing McData Corporations for near $4.61 a share. As such a venture usually contributes to higher costs by such an action, the stock plummeted nearly 20% following the news. Already having some volatility because of stock option controversy, the stock has been hit quite a bit. However, debate aside it seems that BRCD has hit its support level.

Speaking on technical terms, with such news it was clear that BRCD was going to break its previous support level which stayed around 5.50 for nearly seven months. However, with the new acquisition, the stock fell to near 5.00 most of the day, and even with such a purchase did not seem to fall any further. As a smart investor, you would have noticed such a trend and take advantage of such signals, but if you did miss it there is still a chance to get into the action.

With both a one year estimate and 52 week high around 7.10, there is a high possibility that this company will provide high capital gains by the end of the year. While the fundamentals for the recent quarter are near and should not be all that favorable, the recent acquisition with McData should help future guidance for BRCD, utilizing the process of synergy to achieve both cost cutting and profit making advances. While such an amalgamation may take some time, I can potentially see BRCD going as high as 15.00 by December of next year. Such an acquisition will only lead to new growth, and with a resistance level firmly in support, I would recommend BRCD as a mid to long term buy at a price of 5.00-5.30.

Dennis Biray presents advice on all kinds of topics ranging from finance and investing to fitness to sports. For more information email him at dbiray@gmail.com, or to view other articles written by him visit http://www.biraynetworks.co.nr/.

Hey Guys,

Do any of you remember? When people were selling Nokia Corp. like crazy? This happened about 2 years ago. The stock was at 22 and within 4 months it was down to 12. You were hearing in the news that Nokia was losing market share in europe. Their style of hand phones was outdated. SELL!, SELL!, SELL! This all was the cause for the manic selling.

Go two years back and look at Nokia Corp. finances. Two years ago they had no debt, their free cashflow was huge, about 2,000,000,000 at all times. Their revenues were growing every year by billions and still is. Remember, when people said they were losing market share? Well, They were actually gaining market share, overall in the world. It was just in europe. Where they were losing a few percentage points of market share.

I am telling this story becuase there is a lesson to be learned here. Do Your Own Homework. The news, reports, and etc. were saying stay away from nokia. While at the time I was trying to convince my Aunt to Buy!, Buy!. She likes to invest a little. Also, she didn’t listen either, lol. Now, the stock is up about 100% in two years.

http://allaboutstocks.wordpress.com

With such a rudimentary phrase famed by the famous commercials of years past, Dell has been one of the most prominent kings of computer production. However, while this large cap stock has remained relatively stable during the last five years, 2006 proved to be an onus to Dell shareholders with continued amounting capital losses as the stock neared a five year low. However, if you look pass such negativity and focus on trends and technical analysis, you will convincingly find Dell as a bargain for a price under 25 dollars.

Typically during the fourth quarter of seasons end, Dell prices have followed an upward trend towards large capital gains. Such achievement is usually attributed to strong fundamentals which spawn from the sales from the company’s popularized notebook and desktop computers along with accessories during the back-to-school months of August through October. With such a seasonal increase in revenue and profit, transcending to earnings, the outlook for Dell shares characteristically remain strong through the fall and winter months. The last five years have proven to provide such evidence as shown through technical assistance. Last year during this time period, the stock increased nearly 10%, the year prior to that: 20%, during 4th quarter 2003: 5%, 4th quarter 2002: 15%, and during the 4th quarter of 2001, when the price of Dell was at a number similar to this year, the price went up nearly 100% for the duration of that period. One of the key fundamentals in making profits with equities is to follow trends, and Dell provides a positive inclination which will inevitably yield high capital gains.

While an argument can be made that the economy is showing some indication of a slowdown which is not favorable for technology stocks, during 2001 and 2002 when similar accusations were held, the price of the stock did not adversely heed such information and garnered gains at a rapid pace. With a price near the 20.00-25.00 range, and with the prospect of an exciting fourth quarter ahead, I look for Dell to prove many critics wrong when smart investors are racking up a cornucopia of profits around January.

Dennis Biray presents advice on all kinds of topics ranging from finance and investing to fitness to sports. For more information email him at dbiray@gmail.com, or to view other articles written by him visit http://www.biraynetworks.co.nr/

Berkshire Hathaway’s subsidiary National Indemnity Corp, owned by Warren Buffett acquired 6.9 million shares at $40/share of USG Corp as of 08/02/2006. This was part of the “Rights Offering” Agreement. Now, Berkshire Hathaway owns 15% of USG. There are limitations and other agreements involved with USG and Berkshire Hathaway.Which some limitations and agreements could last for the next 7 years.

At the end of 2005 USG claimed for chapter 11. Due to many asbestos lawsuits. Since, then USG Corps. stock has dropped approx. 50%. Now, they recently made agreements to pay differ amounts in the billions. There are several hundred more cases of asbesto still pending.

It will be interesting to see. What will Berkshire Hathaway do later on. Warren Buffett has been known to take advantage of companies during setbacks. The thing here is that USG was a pretty solid company. Actually, USG is continuing to grow there revenues, despite the set backs. So, I think USG Corp. is worth watching in the next several years.

Berkshire Hathaway owns more than 60 types of businesses worldwide. They own the insurance company called Geico. Also, has major investments in Coca-Cola, and Wells Fargo & Co., and American Express

USG Corporation, through its subsidiaries manufactures and distributes building supplies all over the world.

http://allaboutstocks.wordpress.com/

You may have noticed the recent increase in the price of Qwest during the past 12 months. In fact, during such a volatile time period, the stock has increased near a percentage of 110%. Such activity is uncommon during such a short duration especially as telecommunication company in a sector plagued by oversold equities. Coming off surprising lows of near one dollar almost four years ago, you might be hesitant to join the bandwagon, but also note that a little bit before reaching such a low, Qwest reached a high of 30.00: a mark I believe it will attain again.

Based with strong fundamentals, Qwest is hard to use technical analysis due to its unusual steady increase over the duration of one year. Typically I base a lot of my predictions off resistance and support levels or the head and shoulders concept, but interesting enough, this company does not experience such volatility and grows at a rate you would expect for durations of five to ten years. However, with strong cash flow (especially in the recent report of operating margins) and good guidance which should prop up earnings, Qwest still remains a strong buy. Some investors may argue that since the company has surpassed its recent 52 week high, the stock may be in for a sell off. Well characteristically I would agree with such a sentiment, but the same idea was said when Qwest was around 7.00 and again at 6.00 and 5.00. What happened during those periods? The price did not hit a resistance level and continued to growth at a fairly rapid rate. At a number around 8.50, I will not be a partisan to such a conviction again and proclaim that Qwest has the potential to reach its previous five year highs again.

There should also be a notice that Qwest is still a relatively new company. Setting up an IPO around late 1997, Qwest provided increased competition to other such telecommunication companies. Before falling like the rest of the market in late 2001, Qwest had grown almost 300% in less than three years setting up a situation very similar to today’s value. While you might not gather the capital gains desired if you were lucky and bought the stock near 1.00, buying at a price around 8.00-9.00 for an oversold stock will still accrue large capital gains in the near future. Therefore, with such stability in terms of growth, a seemingly edge over the competition, and good fundamentals, I proclaim Qwest as a strong buy for a period of two to three years.

Dennis Biray presents advice on all kinds of topics ranging from finance and investing to fitness to sports. For more information email him at dbiray@gmail.com, or to view other articles written by him visit http://www.biraynetworks.co.nr/

While you may be saying to yourself after reading the title that CHDT.OB (China Direct Trading), is an over-the-counter equity, the truth is that a lot of reward can come to individuals who take such a risk.

A relatively new company, CHDT utilizes its Florida headquarters to help corporations by selling gifts and promotions along with generator supplies as a subsidiary bracket. Founded in 2002, the company has received modest earnings throughout its four years but recently, as released on their first quarter results, CHDT obtained a $43,000 net profit: the first time in over a year. Revenue has also increased this quarter promoting stability over the past few years.

As the fundamentals are solid, the real component of CHDT comes from its volatility. Currently selling at 0.08 (August 2006), this equity can be responsible for increasing portfolios over five percent on a daily basis. As volume is already quite high relative to a capitalization of 48 million, already investors have found an undercover stock which has such a high potential of rewards.

As CHDT has a resistance level of near 0.15 and a support level of around 0.08, there is a strong potential that an investor can continuously make over 100% in terms of return of investment in only weeks in some cases. While there is also the potential to lose that much as well, with such levels of support and resistance, if the investor is smart he or she will heed such information and use time to his or her advantage. For example if one such investor were to buy CHDT at near 0.087 on Monday August 1, 2006, by Wednesday the investor would have made nearly 30% profit if he or she sold during the day’s high.

Thus, while there is potential for immense losses for such a risky stock, the rewards are plentiful especially for such a cheap price. Both growth and profits seem to be rising at a solid rate, and the price reflects such a remark giving investors a large chance to win big. With such noticeable support and resistance levels, any investor who uses timing to his or her advantage will find a nice portfolio growth in the future. While such a stock may not be favorable for emotional investors, investors who utilize reason without having to wait such a long time will find this stock as a great investment in the short run.

Dennis Biray presents advice on all kinds of topics ranging from finance and investing to fitness to sports. For more information email him at dbiray@gmail.com, or to view other articles written by him visit http://www.biraynetworks.co.nr.

If you have read my other articles regarding choosing stocks to invest in you have by now known that I like cheap volatile stocks. While the stock discussed in this article is relatively cheap, the volatility is quite high and can drastically change capital losses to capital gains quite in a short amount of time.

Looking more in terms of the public equity itself, as EBay has grown to be nearly a decade old, it was inevitable that competitors were around looking to take some of the concentration ratio away. GMarket, another ecommerce website, hopes to provide such extravagant competition to CEO Meg Whitman’s firm. Already proving to be more popular in the Asian market in countries such as Korea, GMarket is hoping to expand and provide extra benefits which EBay does not offer to entice more users. As EBay’s price has fallen dramatically over the past year, GMarket, which recently opened as an IPO, hopes to take advantage of such activity and prove to be the next big internet phenomenon.

Supporting a resistance level of near 15.50 and a support level of near 13.00, GMarket is a perfect opportunity for timely investors to rack in capital gains at little expense. Fluctuating between these levels for the past month, an investor is able to make an easy 20% profit in one to two weeks time if the stock is bought around the low of 13.00. In fact, with an estimated one year estimate of 20.00, truthfully buying at any point less than 15.00 may be a bargain. If EBay continues a downward trend and GMarket is able to obtain some control of the market, there is even potential for the company to reach 50.00 in a few years time.

While technical analysis and potential are good starting points to be optimistic about GMarket, even by looking at the fundamentals it is evident this company has a bright future. With 2nd quarter results initially confirming a one year growth of revenue of 165% and a one year growth of earnings near 135%, GMarket covers all its bases in regards to positive criticism from investors. Recently given the light to outperform the market by a few respectable brokers, gives me the assurance to agree with such sentiment and allows to label GMarket as a strong buy for both risky investors wanting to make a quick profit as well as long term investors eager for growth making this an excellent stock to invest in regardless of future ambitions.

Dennis Biray presents advice on all kinds of topics ranging from finance and investing to fitness to sports. For more information email him at dbiray@gmail.com, or to view other articles written by him visit http://www.biraynetworks.co.nr/.

To often beginning investors like to get involved with stocks that have been either focused on the news or provide a name which is recognizable in terms of products or services. While such assessment may be warranted in terms of steady growth and stability, such convictions are not always true and may provide discouragement more often than optimism. The company Nortel, a telecommunication corporation, seems to fit such a sentiment and provides no assurance for further capital gains.

When looking at the aspects of technical analysis over the past five years, Nortel has engaged in some rapid fluctuations creating a vast collage of emotions for investors. After reaching a high near 8.50 during the winter of 2002, shares of Nortel, like most other technological stocks, fell in dramatic fashion to an all time low. Typically, while technological stocks fall during times of recession, a margin of nearly 85% was too high to go unheeded. Such a situation only presented itself as a foreboding venture to be part of. If you were lucky you would have bought the stock at such a low price and intelligently sell such shares when the stock reached yearly highs of 6.00-8.00 nearly one year later. If you were not so lucky and were succumbed to the forces of avarice, as an investor you were put into a world of hurt.

I still remember the day exquisitely. It was near the end of April of 2004, and I turned on my computer to learn about the accounting problems facing the company which eventually transcended into a nightmare of restatements, delayed restatements, corporate official changes, and an ignorant attitude awaiting for the price to reach 8.50 again. However, up to this day such a price has not been reached, and I do not expect such a rise anytime soon.

Sitting on its worst levels of 2.00, the lowest since October of 2002, you would expect such a branded company based in such a sector to be at a 52 week high by now. Nortel, which finished the accounting disarray months ago, acquired competent personal for its front office, expanded its resources and products into emerging nations, recently posted good earnings and revenue margins, provided guidance for increased profit potential, and came off high times of inflation when such a stock usually performs at its best is still at struggling at its 52 week low. With a recession becoming more inevitable everyday, I see no optimism for Nortel, especially because of the cautions institutional investors are placing on this stock. While I do not like telecommunication stocks during such a time period, if you have to pick some stocks of this kind, look a different way, because there is really no telling of the harms that Nortel can cause you.

Dennis Biray presents advice on all kinds of topics ranging from finance and investing to fitness to sports. For more information email him at dbiray@gmail.com, or to view other articles written by him visit http://www.biraynetworks.co.nr.