Microsoft Stock Analysis: Hedge Fund Activity & Strong Earnings

Microsoft Stock Update: Institutional Activity & Q3 Performance

Microsoft Stock– Bfsg LLC, in its latest Form 13F filing with the Securities and Exchange Commission (SEC), reported a 3.7% decrease in its holdings of Microsoft Corporation (NASDAQ: MSFT) during the third quarter of 2023. The firm reduced its stake by 2,516 shares, leaving it with a total of 66,379 shares. As of the most recent SEC filing, Microsoft represents approximately 3.3% of Bfsg LLC’s investment portfolio, making it the firm’s second-largest holding. The market value of the firm’s Microsoft stake was reported at $28.56 million.

Hedge Funds Adjust Their Microsoft Positions in Q3

Bfsg LLC wasn’t the only institution to adjust its Microsoft position during the third quarter. Other prominent hedge funds also modified their stakes in the software giant:

• SPC Financial Inc. increased its Microsoft holdings by 4.5%, acquiring an additional 1,177 shares to bring its total to 27,298 shares, valued at $11.75 million.
• Annapolis Financial Services LLC raised its position by 1.2%, purchasing 27 more shares, for a total of 2,223 shares worth $957,000.
• B.O.S.S. Retirement Advisors LLC significantly boosted its Microsoft stake by 18.1%, adding 8,138 shares, bringing its total to 53,016 shares valued at $22.81 million.
• AAFMAA Wealth Management & Trust LLC grew its Microsoft holdings by 12.8%, adding 1,416 shares to reach a total of 12,460 shares worth $5.36 million.
• Market Street Wealth Management Advisors LLC increased its position by 8.4%, purchasing 282 additional shares, bringing its total to 3,625 shares worth $1.56 million.

Collectively, these hedge funds and institutional investors own 71.13% of Microsoft’s stock, reflecting its strong presence in institutional portfolios.

Microsoft Stock Overview: Strong Earnings and Market Performance

As of the latest data, Microsoft’s stock opened at $443.57 on Friday, reflecting a 0.2% increase. The company maintains a robust market capitalization of $3.30 trillion, with a price-to-earnings (P/E) ratio of 36.60 and a PEG ratio of 2.29. The stock’s 1-year low is $364.13, while its 1-year high stands at $468.35. With a debt-to-equity ratio of 0.15, quick ratio of 1.29, and current ratio of 1.30, Microsoft demonstrates solid financial health.

The company also reported strong earnings for the third quarter of fiscal 2023. Microsoft posted $3.30 earnings per share (EPS), exceeding analysts’ expectations of $3.10 by $0.20. With a return on equity of 34.56% and a net margin of 35.61%, Microsoft continues to deliver strong profitability. The company reported $65.59 billion in revenue for the quarter, surpassing analyst estimates of $64.57 billion. This marks a 16.0% year-over-year increase in revenue. For the full fiscal year, analysts expect Microsoft to report $12.93 in EPS.

Microsoft Stock Buyback Program and Dividend Announcement

Microsoft’s management also made headlines with a $60 billion stock repurchase program, which was authorized on September 16th. This buyback plan, which allows the company to repurchase up to 1.9% of its outstanding sharesthrough open market purchases, signals the company’s belief that its stock is undervalued.

Additionally, Microsoft announced its quarterly dividend, which will be paid on March 13th, 2024. Shareholders of record on February 20th, 2024, will receive a dividend of $0.83 per share, representing an annualized dividend of $3.32 and a yield of 0.75%. The dividend payout ratio stands at 27.39%.

Insider Activity at Microsoft

In terms of insider transactions, Christopher David Young, Microsoft’s Executive Vice President, sold 7,200 shares on November 12th, 2023, at an average price of $423.66 per share. The total value of this transaction was $3.05 million, reducing Young’s holdings by 6.51%. After the sale, he retained 103,366 shares, valued at approximately $43.79 million.

Additionally, Takeshi Numoto, Chief Marketing Officer at Microsoft, sold 2,000 shares on December 4th, 2023, at an average price of $437.32, amounting to a transaction worth $874,640. This represented a 3.71% decrease in his holdings. In total, insiders sold 98,578 shares valued at approximately $40.55 million in the last 90 days. Insiders now own a mere 0.03% of Microsoft’s stock.

Wall Street Analysts’ Perspectives on Microsoft

Several Wall Street analysts have updated their ratings and price targets for Microsoft, reflecting varying levels of optimism about the stock:

• Piper Sandler maintained an “overweight” rating and set a price target of $470.00.
• KeyCorp raised its target price for Microsoft from $490.00 to $505.00, maintaining an “overweight” rating.
• Oppenheimer downgraded Microsoft from “outperform” to “market perform”.
• UBS Group lowered its price target from $510.00 to $500.00, reiterating a “buy” rating.
• TD Cowen reduced its price target from $495.00 to $475.00, maintaining a “buy” rating.

A consensus of analysts currently rates Microsoft as a “Moderate Buy” with an average target price of $504.36.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.