Foster & Motley Inc. Reduces Stake in Microsoft Co. (NASDAQ:MSFT)

Foster & Motley Inc. has reduced its holdings in Microsoft Co. (NASDAQ:MSFT – Free Report) by 1.6% during the second quarter, as indicated in the firm’s latest filing with the Securities and Exchange Commission (SEC). Following the sale of 966 shares during this period, the company now owns a total of 58,931 shares in the software giant. As of the most recent report, Foster & Motley Inc.'s investment in Microsoft is valued at approximately $26,339,000, representing 1.8% of its overall investment portfolio, making it the 10th largest holding of the firm.

In addition to Foster & Motley Inc., several other institutional investors and hedge funds have also been active in buying and selling Microsoft shares. For instance, Christopher J. Hasenberg Inc. increased its holdings of Microsoft shares by a significant 169.2% in the second quarter, acquiring a total of 70 shares valued at $31,000 after buying an additional 44 shares. Another firm, Richardson Capital Management LLC, raised its Microsoft holdings by an impressive 1,290.0% during the first quarter, now owning 139 shares valued at $59,000 after adding 129 shares. Innealta Capital LLC took a new position in Microsoft during the second quarter, valued at approximately $75,000, while Bellevue Group AG boosted its stake by 47.5% in the first quarter, holding 180 shares valued at $76,000 after acquiring an additional 58 shares. Horizon Financial Services LLC also purchased a new stake in Microsoft in the first quarter, valued near $80,000. Overall, institutional investors and hedge funds now hold 71.13% of Microsoft's stock.

Recent Analyst Ratings

There have been various updates from equities research analysts concerning Microsoft shares. For example, Wedbush reiterated an “underperform” rating for Microsoft in a recent report. Citigroup adjusted its price target from $520.00 to $500.00, maintaining a “buy” rating for the company. Oppenheimer downgraded Microsoft from an “outperform” rating to a “market perform” rating, while Royal Bank of Canada reaffirmed an “outperform” rating with a price objective of $500.00. KeyCorp increased its target price from $490.00 to $505.00, giving Microsoft an “overweight” rating. Currently, one analyst has rated the stock as a sell, three as a hold, and twenty-eight analysts have issued a buy rating. According to MarketBeat.com, Microsoft holds a consensus rating of “Moderate Buy” with an average target price of $495.68.

Insider Trading Activity

Recent insider trading activity has included significant sales of Microsoft shares. For instance, insider Bradford L. Smith sold 40,000 shares on September 9th at an average price of $402.59, totaling approximately $16,103,600. Following this transaction, Smith holds 544,847 shares valued at around $219,349,953.73, indicating no change in ownership percentage. Additionally, CEO Satya Nadella sold 78,353 shares on September 4th at an average price of $408.63 for approximately $32,017,386.39, retaining 864,327 shares valued at about $353,189,942.01. Over the last 90 days, insiders have sold a total of 190,629 shares valued at $77,916,485, further demonstrating ongoing stock transactions. Insiders currently own a mere 0.03% of the company’s stock.

Microsoft Stock Performance Overview

As of Friday, Microsoft stock opened at $418.16. The company maintains a debt-to-equity ratio of 0.16, along with both a quick ratio and current ratio of 1.27. The stock’s 52-week low stands at $324.39 while its high is recorded at $468.35. Microsoft has a market capitalization of $3.11 trillion, a P/E ratio of 36.20, a price-to-earnings-growth ratio of 2.22, and a beta of 0.90. Currently, the stock has a fifty-day moving average of $419.66 and a 200-day moving average of $424.49.

Microsoft last reported its earnings on July 30th, showing earnings per share (EPS) of $2.95, surpassing analysts’ expectations of $2.90 by a small margin. Microsoft also exhibited a strong return on equity of 35.95% and a net margin of 35.96%. The company generated revenue amounting to $64.73 billion, exceeding expected figures of $64.38 billion, and representing a 15.2% increase compared to the same quarter from the previous year. Analysts forecast that Microsoft will post earnings of 13.02 EPS for the current fiscal year.

Dividend Increase Announcement

Microsoft has also recently announced a quarterly dividend, scheduled for payment on December 12th, for shareholders on record as of November 21st, who will receive a dividend of $0.83. This results in an annualized dividend of $3.32, marking a dividend yield of 0.79%. This dividend reflects an increase from the previous quarter's dividend of $0.75, and the company’s payout ratio currently stands at 28.74%.

Furthermore, Microsoft’s Board of Directors approved a substantial share buyback program on September 16th, authorizing the repurchase of up to $60.00 billion in outstanding shares, equivalent to approximately 1.9% of its stock in the open market. Such buyback programs usually suggest that the management believes the company’s shares are undervalued.

About Microsoft Corporation

Microsoft Corporation is a leading technology company known for developing and supporting software, services, devices, and solutions on a global scale. Its Productivity and Business Processes division includes products like Office, Microsoft Teams, and Microsoft 365 services, among others.

Microsoft, Investors, Analysts