Microsoft shares may stay cheap: Barron's

NEW YORK (Reuters) - Shares of software giant Microsoft Corp (MSFT.O) are likely to remain at current levels until its bid to buy Yahoo in whole or part is resolved, said an article in the May 26 edition of Barron's.

At current price levels, Microsoft fetches just about 13.2 times its earnings guidance of $2.13 to $2.19 a share for the June 2009 fiscal year, the report in the weekly financial publication said.

Microsoft's valuation looks odd when compared to other big software and Internet stocks like Oracle Corp (ORCL.O) and SAP AG (SAPG.DE), which trade at above 15 times expected earnings, said the report.

With Microsoft down about 21 percent for the year and trading close to a 52-week low, the downside seems limited. But the stock is unlikely to gain much ground until the Yahoo Inc (YHOO.O) situation plays out, said the report.

(Reporting by Euan Rocha, editing by Leslie Gevirtz)