Blue Grotto Capital LLC Takes Position in Microsoft Corporation $MSFT

Key Points

• Blue Grotto Capital LLC opened a new position in Microsoft in the fourth quarter, buying 84,252 shares worth about $40.7 million. The stake represents about 4.2% of its portfolio.
• Microsoft’s stock was down 1.5% in Wednesday trading, opening at $393.83, while the company still carries a massive $2.93 trillion market cap.
• The company posted strong recent results, with earnings and revenue both beating estimates, and analysts remain broadly positive with a consensus rating of Moderate Buy and an average price target of $561.20.

Blue Grotto Capital LLC bought a new stake in shares of Microsoft Corporation (NASDAQ:MSFT - Free Report) in the fourth quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission. The institutional investor bought 84,252 shares of the software giant's stock, valued at approximately $40,746,000. Microsoft accounts for about 4.2% of Blue Grotto Capital LLC's portfolio, making the stock its 14th largest holding.

Other institutional investors and hedge funds have also recently modified their holdings of the company. Longfellow Investment Management Co. LLC boosted its holdings in Microsoft by 51.3% in the 2nd quarter. Longfellow Investment Management Co. LLC now owns 59 shares of the software giant's stock worth $29,000 after buying an additional 20 shares during the period. Bernzott Capital Advisors bought a new position in Microsoft in the 4th quarter worth approximately $34,000. Timmons Wealth Management LLC bought a new position in Microsoft in the 4th quarter worth approximately $36,000. Fairway Wealth LLC boosted its holdings in Microsoft by 287.0% in the 4th quarter. Fairway Wealth LLC now owns 89 shares of the software giant's stock worth $43,000 after buying an additional 66 shares during the period. Finally, University of Illinois Foundation bought a new position in Microsoft in the 2nd quarter worth approximately $50,000. 71.13% of the stock is owned by institutional investors.

Insider Buying and Selling

In other news, EVP Takeshi Numoto sold 4,500 shares of Microsoft stock in a transaction on Wednesday, June 10th. The shares were sold at an average price of $402.84, for a total transaction of $1,812,780.00. Following the completion of the sale, the executive vice president directly owned 47,468 shares of the company's stock, valued at approximately $19,122,009.12. The trade was a 8.66% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is accessible through this link. Also, CEO Judson Althoff sold 15,500 shares of Microsoft stock in a transaction on Monday, June 1st. The stock was sold at an average price of $460.99, for a total transaction of $7,145,345.00. Following the sale, the chief executive officer directly owned 110,477 shares of the company's stock, valued at $50,928,792.23. This represents a 12.30% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Over the last quarter, insiders have sold 23,762 shares of company stock worth $10,508,361. Corporate insiders own 0.03% of the company's stock.

Microsoft Trading Down 1.5%

Shares of MSFT stock opened at $393.83 on Wednesday. The company has a debt-to-equity ratio of 0.08, a quick ratio of 1.27 and a current ratio of 1.28. Microsoft Corporation has a 52-week low of $356.28 and a 52-week high of $555.45. The company has a market capitalization of $2.93 trillion, a PE ratio of 23.44, a price-to-earnings-growth ratio of 1.44 and a beta of 1.11. The business's fifty day moving average is $412.01 and its 200 day moving average is $427.45.

Microsoft (NASDAQ:MSFT - Get Free Report) last issued its quarterly earnings data on Wednesday, April 29th. The software giant reported $4.27 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $4.06 by $0.21. Microsoft had a return on equity of 31.94% and a net margin of 39.34%.The company had revenue of $82.89 billion for the quarter, compared to the consensus estimate of $81.44 billion. During the same quarter last year, the business posted $3.46 earnings per share. The firm's revenue was up 18.3% compared to the same quarter last year. On average, equities research analysts anticipate that Microsoft Corporation will post 16.76 EPS for the current fiscal year.

Microsoft Dividend Announcement

The firm also recently disclosed a quarterly dividend, which will be paid on Thursday, September 10th. Investors of record on Thursday, August 20th will be given a $0.91 dividend. This represents a $3.64 dividend on an annualized basis and a dividend yield of 0.9%. The ex-dividend date is Thursday, August 20th. Microsoft's dividend payout ratio (DPR) is 21.67%.

Analyst Upgrades and Downgrades

Several research firms recently commented on MSFT. Piper Sandler reaffirmed an "overweight" rating on shares of Microsoft in a report on Tuesday, May 26th. Barclays reaffirmed an "overweight" rating on shares of Microsoft in a report on Wednesday, June 3rd. Cantor Fitzgerald reaffirmed an "overweight" rating and issued a $502.00 price objective on shares of Microsoft in a report on Thursday, June 4th. Benchmark reaffirmed a "buy" rating and issued a $525.00 price objective (up from $450.00) on shares of Microsoft in a report on Tuesday, April 28th. Finally, William Blair reaffirmed an "outperform" rating on shares of Microsoft in a report on Monday, March 9th. Forty-one analysts have rated the stock with a Buy rating and six have assigned a Hold rating to the stock. According to MarketBeat.com, Microsoft has an average rating of "Moderate Buy" and a consensus price target of $561.20.

More Microsoft News

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Microsoft launched a new AI agent with pay-as-you-go pricing, a shift that could improve monetization and help the company capture more revenue as customers adopt usage-based AI tools.
• Positive Sentiment: Reports say Microsoft is exploring lower-cost AI model options for Copilot, which could reduce infrastructure costs and improve profitability if implemented successfully.
• Positive Sentiment: Microsoft’s product and AI roadmap continues to attract long-term bulls, with analysts and investors still pointing to the company’s strong enterprise position and AI-driven growth potential.
• Neutral Sentiment: Microsoft was reported to have held talks for a $3 billion Oracle cloud infrastructure lease, but the deal reportedly collapsed over security and compliance issues, limiting any near-term impact on operations.
• Neutral Sentiment: Coverage around a possible Xbox restructuring or spin-off highlights strategic uncertainty in gaming, though it could eventually improve Microsoft’s overall margin profile if the division is separated or reshaped.
• Negative Sentiment: Shareholders filed a class action and securities-fraud investigations were announced over alleged misstatements tied to Azure growth and AI spending, creating legal and reputational overhang for Microsoft Corporation NASDAQ: MSFT.
• Negative Sentiment: Reports that Microsoft may shut down or restructure Xbox studios add to concerns that the gaming segment is a drag on profitability and could require more restructuring costs.
• Negative Sentiment: Recent commentary also points to heavy AI capital expenditures and softer Azure growth, reinforcing investor worries that Microsoft’s spending is rising faster than its cloud revenue growth.

About Microsoft

Microsoft Corporation is a global technology company headquartered in Redmond, Washington. Founded in 1975 by Bill Gates and Paul Allen, Microsoft develops, licenses and supports a broad range of software products, services and devices for consumers, enterprises and governments worldwide. Its operations span personal computing, productivity software, cloud infrastructure, enterprise applications, developer tools and gaming.

Microsoft's product portfolio includes the Windows operating system and the Microsoft 365 suite of productivity and collaboration tools (Office apps, Outlook, Teams).

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