Foster & Motley Inc. Reduces Microsoft Stake by 1.6%

On October 19, 2024, Foster & Motley Inc. reported a reduction in their holdings of Microsoft Co. (NASDAQ:MSFT – Free Report) by 1.6% during the second quarter. This information was disclosed in the company’s latest filing with the Securities and Exchange Commission. Following this adjustment, Foster & Motley Inc. now owns 58,931 shares of Microsoft after selling 966 shares during the period. The value of its Microsoft investments was approximately $26,339,000, making Microsoft 1.8% of their total investment portfolio and the 10th largest holding.

Other institutional investors and hedge funds have also made adjustments to their holdings in Microsoft recently. Notably, Christopher J. Hasenberg Inc. increased its stake by 169.2% during the second quarter, owning 70 shares valued at $31,000 after acquiring an additional 44 shares. Richardson Capital Management LLC saw a massive increase of 1,290.0% in their holdings during the first quarter, now representing 139 shares valued at $59,000 after buying 129 more. Innealta Capital LLC created a new position in Microsoft during the second quarter with an investment valued at around $75,000. Meanwhile, Bellevue Group AG also raised their ownership by 47.5% during the first quarter, with 180 shares now valued at $76,000 after purchasing an additional 58 shares. Horizon Financial Services LLC is another firm that bought a new stake in Microsoft valued at approximately $80,000 in the first quarter. Overall, institutional investors and hedge funds collectively hold about 71.13% of Microsoft’s stock.

Changes in Analyst Ratings

Several equities research analysts have provided updates regarding Microsoft’s shares. In a report dated Friday, Wedbush reiterated an “underperform” rating for the stock. Similarly, Citigroup lowered its price target for Microsoft from $520.00 to $500.00 while maintaining a “buy” rating. This was reported on July 31st. Oppenheimer downgraded Microsoft from an “outperform” rating to a “market perform” rating in early October. On the other hand, Royal Bank of Canada maintained an “outperform” rating with a price target set at $500.00. KeyCorp increased their target price from $490.00 to $505.00, giving the stock an “overweight” rating. Current consensus shows one research analyst giving the stock a sell rating, three assigning it a hold rating, and twenty-eight recommending a buy, resulting in an overall consensus rating of “Moderate Buy” with an average price target of $495.68.

Insider Transactions

Recent insider trading has included notable sales by company executives. Bradford L. Smith, an insider, sold 40,000 shares on September 9th at an average price of $402.59, totaling $16,103,600. Following this transaction, Smith retained a total of 544,847 shares valued at around $219,349,953.73. This sale represented no change in his ownership percentage. Additionally, CEO Satya Nadella sold 78,353 shares on September 4th at an average price of $408.63 with a total value of $32,017,386.39. Post-sale, Nadella held 864,327 shares of Microsoft, valued at approximately $353,189,942.01. In total, insiders sold 190,629 shares valued at about $77,916,485 over the past 90 days, with insiders collectively owning 0.03% of Microsoft’s stock.

Microsoft Stock Performance

Microsoft’s stock opened at $418.16 recently. The firm has a debt-to-equity ratio of 0.16, a quick ratio of 1.27, and a current ratio also of 1.27. The company’s stock has found a 52-week low at $324.39 and a high at $468.35. With a market capitalization of $3.11 trillion, Microsoft reports a P/E ratio of 36.20 and a price-to-earnings-growth ratio of 2.22. The stock's fifty-day moving average is $419.66, while its 200-day moving average is $424.49.

Microsoft announced earnings results on July 30th, where they reported earnings per share (EPS) of $2.95, exceeding analysts' expectations of $2.90 by $0.05. The company recorded a return on equity of 35.95% and a net margin of 35.96%. Revenue for the quarter reached $64.73 billion, slightly above the anticipated $64.38 billion, and showed a year-over-year increase of 15.2% compared to the same period last year. Analysts forecast that Microsoft Co. will post EPS of 13.02 for the current fiscal year.

Microsoft Ups Dividend

Furthermore, Microsoft has declared a quarterly dividend of $0.83 scheduled for payment on December 12th. Shareholders on record by November 21st will be eligible to receive this dividend, resulting in an annualized yield of 0.79% based on a total of $3.32. This is an increase from their previous dividend of $0.75. Microsoft’s payout ratio stands at approximately 28.74%.

Share Buyback Program Announced

The Board of Directors at Microsoft has approved a share buyback program allowing for the repurchase of up to $60 billion in outstanding shares. This authorization enables the company to buy back around 1.9% of its stock through open market transactions, which generally suggests that management believes that its stock is undervalued.

About Microsoft Corporation

Microsoft Corporation develops and provides software, services, devices, and solutions on a global scale. The company’s Productivity and Business Processes segment includes offerings such as Microsoft 365, Office, Exchange, SharePoint, Microsoft Teams, and more.

FosterMotley, Microsoft, Investment