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No. of Recommendations: 2
MSFT Best Long Idea, Says Arete, Yanks AAPL Recommendation

Boutique research firm Arete Research’s software analysts Adam Shepherd and Alex Trout today sent a missive to clients reminding them that Microsoft (MSFT) remains one of the firm’s “Best Ideas” for long stock positions, while their colleague Richard Kramer covering Apple (AAPL) advises that its time to pull the plug on that stock as a Best Idea.

Shepherd and Trout, who have a $40 price target on Microsoft shares, write that the release of Windows 8 by Microsoft on October 26th will solve a lot of problems for Microsoft, including how it deals with the consumer PC buying market:

We see Windows 8 as a panacea for Microsoft’s consumer franchise, as it pushes into the device market and accelerates the transition to a subscription-based software model. In the long run, monetising services cuts Microsoft’s reliance on OS and Windows licencing, allowing it to drive revenue growth in a world dominated by ultra-low cost devices. We think Microsoft can see the first leg of an upward re-rating based on the successful launch of Windows 8.
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