Microsoft Corporation (NASDAQ: MSFT): The Best-Of-Breed For Investing?


BlackRock Fund Advisors recently announced the acquisition of new stake in Microsoft Corporation (NASDAQ:MSFT). The institutional investor has increased its shareholding in the Technology company by 1.40% to 351.85 million shares with purchase of 4.85 million shares. This fresh investment now brings its stake to 4.65% valued currently at $72.13 billion. In addition, T. Rowe Price Associates, Inc. (I. raised its holdings by 11.03 million to 183.09 million shares. And Geode Capital Management LLC has lifted its position by 0.87% or 1.0 million shares – to 116.69 million shares.

With over 25.4 million Microsoft Corporation (MSFT) shares trading Monday and a closing price of $213.69 on the day, the dollar volume was approximately $5.43 billion. The shares have shown a positive weekly performance of 1.62% and its price on 08/24/20 gained nearly 0.31%. Currently, there are 7.58B common shares owned by the public and among those 7.46B shares have been available to trade.

An analysis of what Wall Street brokers have to say about the expected price targets for this stock gives us this picture: 32 analysts who have offered their price forecasts for MSFT have a consensus price objective of $231.23. The analysts have set the share’s price value over the next 12 months at a high of $260.00 and a low of $208.00 should the stock experience a downside. Incidentally, analysts’ outlook for the Microsoft Corporation stock is 1.70 for the next 12 months. The average price target is 5.83% above its last price level and an upside to the estimated low will see the stock lose -2.74% over that period. But an upside of 17.81% will see the stock hit the forecast high price target while mean target price for the stock is $230.00.

Insiders at the company have transacted a total of 122 times over the past 12 months, according to data filed with the U.S. Securities and Exchange Commission (SEC). 45 of these insider trades were purchases, accounting for 2,213,415 shares. Insider sales of the common stock occurred on 77 occasions, with total insider shares sold totaling 1,785,457 shares.

The top 3 mutual fund holders in Microsoft Corporation are Vanguard Total Stock Market Index, Vanguard 500 Index Fund, and SPDR S&P 500 ETF. Vanguard Total Stock Market Index owns 215.55 million shares of the company’s stock, all valued at over $44.19 billion. The company sold -0.6 million shares recently to bring their total holdings to about 2.85% of the shares outstanding. Vanguard 500 Index Fund sold -0.95 million shares to see its total holdings shrink to 156.38 million shares valued at over $32.06 billion and representing 2.07% of the shares outstanding. SPDR S&P 500 ETF bought 0.16 million shares to bring its total holdings to over 81.28 million shares at a value of $16.66 billion. SPDR S&P 500 ETF now owns shares totaling to 1.07% of the shares outstanding.

Shares of Microsoft Corporation (NASDAQ: MSFT) opened at $214.79, up $1.77 from a prior closing price of $213.02. However, the script later closed the day at $213.69, up 0.31%. The company’s stock has a 5-day price change of 1.62% and 17.69% over the past three months. MSFT shares are trading 35.50% year to date (YTD), with the 12-month market performance up to 60.20% higher. It has a 12-month low price of $132.52 and touched a high of $217.64 over the same period. Currently, 25.4 million shares have been traded, compared to an average intraday trading volume of 34.37 million shares. The stock is trading above its simple moving averages at the SMA20, SMA50, and SMA200, as the current price level is off by 2.05%, 3.94%, and 21.68% respectively.

Institutional ownership of Microsoft Corporation (NASDAQ: MSFT) shares accounts for 72.90% of the company’s 7.58B shares outstanding. Mutual fund holders own 41.09%, while other institutional holders and individual stakeholders account for 6.22% and 31.31% respectively.

It has a market capitalization of $1628.97B and a beta (3y monthly) value of 0.88. The stock’s trailing 12-month PE ratio is 37.07, while the earnings-per-share (ttm) stands at $5.76. The company has a PEG of 2.47 and a Quick Ratio of 2.50 with the debt-to-equity ratio at 0.62. Price movements for the stock have been influenced by the stock’s volatility, which stands at 1.77% over the week and 1.98% over the month.

Analysts forecast that Microsoft Corporation (MSFT) will achieve an EPS of $1.54 for the current quarter, $1.61 for the next quarter and $7.34 for 2022. The lowest estimate earnings-per-share for the quarter is $1.49 while analysts give the company a high EPS estimate of $1.61. Comparatively, EPS for the current quarter was $1.38 a year ago. Earnings per share for the fiscal year are expected to increase by 13.40%, and 13.59% over the next financial year. EPS should shrink at an annualized rate of 15.00% over the next five years, compared to 31.30% over the past 5-year period.

If you are looking to buy this stock, then you may note that the average analyst recommendation by 32 brokerage firm advisors rate Microsoft Corporation (MSFT) as a “Strong Buy” at a consensus score of 1.70. Specifically, 27 Wall Street analysts polled rate the stock as a buy, while 3 of the 32 advise that investors “hold,” and 0 rated it as a “Sell.”

Looking at the support for the MSFT, a number of firms have released research notes about the stock. Oppenheimer stated their Perform rating for the stock in a research note on July 23, 2020, with the firm’s price target at. Stifel coverage for the Microsoft Corporation (MSFT) stock in a research note released on July 20, 2020 offered a Buy rating with a price target of $215. BMO Capital Markets was of a view on July 15, 2020 that the stock is Outperform, while Wedbush gave the stock Outperform rating on July 09, 2020, issuing a price target of $220- $260. Argus on their part issued Buy rating on June 24, 2020.


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