• Bloomberg News, Wednesday, August 6, 2008 12 PM

A top-rated software analyst says that Microsoft is poised to buy back as much as $20 billion worth of company stock to make up for the 20% dip shares have taken since the software giant announced its intention to buy Yahoo. UBS AG analyst Heather Bellini said she expects Microsoft to complete the repurchase over the next three months.

In other words, if you believe her, buy now. "They won't announce it until it's done,'' Bellini said, adding that a buyback of between $15 billion and $20 billion would lift earnings per share by as much as 10 cents annually. Bellini pegs Microsoft shares at $40 in the next year; shares are currently trading at around $26.

However, a large buyback might be the only reason to buy Microsoft stock these days, says analyst Jane Snorek at First American Funds in Minneapolis. Snorek says she lost confidence in CEO Steve Ballmer's ability to get the Internet business right. She said that only a buyback would change her mind. "The larger the better," she said. ''Beyond that, I don't see any catalyst.''

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