Kanawha Capital Management LLC Cuts Stake in Microsoft Corporation $MSFT

Key Points

• Kanawha Capital Management reduced its Microsoft stake by 2.3% in the fourth quarter, but Microsoft remains its largest holding, making up 6.6% of the portfolio with shares valued at about $96.5 million.
• Microsoft reported strong quarterly results, beating earnings and revenue estimates with EPS of $4.27 on revenue of $82.89 billion, up 18.3% year over year.
• The stock continues to draw mixed attention from Wall Street and regulators: analysts keep a Moderate Buy view with an average price target of $560.88, while the UK has opened an antitrust probe into Microsoft’s business software and cloud practices.

Kanawha Capital Management LLC lessened its position in Microsoft Corporation (NASDAQ:MSFT - Free Report) by 2.3% during the fourth quarter, according to the company in its most recent filing with the Securities & Exchange Commission. The fund owned 199,470 shares of the software giant's stock after selling 4,601 shares during the period. Microsoft accounts for 6.6% of Kanawha Capital Management LLC's investment portfolio, making the stock its biggest position. Kanawha Capital Management LLC's holdings in Microsoft were worth $96,467,000 at the end of the most recent reporting period.

A number of other large investors have also recently modified their holdings of MSFT. Longfellow Investment Management Co. LLC boosted its stake in shares of Microsoft by 51.3% during the 2nd quarter. Longfellow Investment Management Co. LLC now owns 59 shares of the software giant's stock valued at $29,000 after purchasing an additional 20 shares in the last quarter. Bayforest Capital Ltd bought a new stake in shares of Microsoft during the 3rd quarter valued at about $38,000. LSV Asset Management bought a new stake in shares of Microsoft during the 4th quarter valued at about $44,000. Sellwood Investment Partners LLC bought a new stake in shares of Microsoft during the 3rd quarter valued at about $49,000. Finally, Daytona Street Capital LLC bought a new stake in shares of Microsoft during the 4th quarter valued at about $50,000. Institutional investors own 71.13% of the company's stock.

Microsoft Stock Performance

Shares of NASDAQ MSFT opened at $421.92 on Monday. Microsoft Corporation has a 1 year low of $356.28 and a 1 year high of $555.45. The stock has a market cap of $3.13 trillion, a P/E ratio of 25.11, a price-to-earnings-growth ratio of 1.52 and a beta of 1.10. The firm has a 50-day moving average of $398.18 and a 200 day moving average of $440.75. The company has a debt-to-equity ratio of 0.08, a current ratio of 1.28 and a quick ratio of 1.27.

Microsoft (NASDAQ:MSFT - Get Free Report) last issued its quarterly earnings results on Wednesday, April 29th. The software giant reported $4.27 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $4.06 by $0.21. Microsoft had a net margin of 39.34% and a return on equity of 31.94%. The company had revenue of $82.89 billion during the quarter, compared to analysts' expectations of $81.44 billion. During the same period last year, the company posted $3.46 EPS. Microsoft's revenue was up 18.3% on a year-over-year basis. As a group, sell-side analysts expect that Microsoft Corporation will post 16.76 EPS for the current fiscal year.

Microsoft Announces Dividend

The company also recently announced a quarterly dividend, which will be paid on Thursday, June 11th. Shareholders of record on Thursday, May 21st will be issued a $0.91 dividend. The ex-dividend date of this dividend is Thursday, May 21st. This represents a $3.64 annualized dividend and a yield of 0.9%. Microsoft's payout ratio is 21.67%.

Wall Street Analyst Weigh In

A number of brokerages have recently weighed in on MSFT. The Goldman Sachs Group reaffirmed a "buy" rating on shares of Microsoft in a research note on Thursday, April 30th. Phillip Securities raised shares of Microsoft to a "buy" rating and set a $485.00 target price on the stock in a research note on Wednesday, May 13th. President Capital lifted their target price on shares of Microsoft from $500.00 to $520.00 and gave the company a "buy" rating in a research note on Thursday, April 30th. Dbs Bank lowered their price target on shares of Microsoft from $678.00 to $573.00 in a research report on Thursday, May 7th. Finally, Arete Research lifted their price target on shares of Microsoft from $730.00 to $870.00 and gave the company a "buy" rating in a research report on Tuesday, May 5th. Thirty-nine investment analysts have rated the stock with a Buy rating and seven have issued a Hold rating to the company's stock. According to MarketBeat.com, the stock has a consensus rating of "Moderate Buy" and an average price target of $560.88.

Insider Activity

In other Microsoft news, EVP Kathleen T. Hogan sold 12,321 shares of Microsoft stock in a transaction dated Friday, March 6th. The shares were sold at an average price of $409.52, for a total value of $5,045,695.92. Following the completion of the transaction, the executive vice president directly owned 137,933 shares of the company's stock, valued at approximately $56,486,322.16. The trade was a 8.20% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this link. Also, Director John W. Stanton bought 5,000 shares of the firm's stock in a transaction on Wednesday, February 18th. The stock was purchased at an average cost of $397.35 per share, with a total value of $1,986,750.00. Following the completion of the acquisition, the director directly owned 83,905 shares of the company's stock, valued at approximately $33,339,651.75. The trade was a 6.34% increase in their position. The disclosure for this purchase is available in the SEC filing. 0.03% of the stock is currently owned by insiders.

Key Microsoft News

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Bill Ackman revealed a new multi-billion-dollar stake in Microsoft (MSFT), saying the company looks attractively valued and highlighting Azure, Microsoft 365, and AI as key growth drivers. Reuters: Ackman's Pershing Square takes stake in Microsoft, citing 'compelling' valuation
• Positive Sentiment: Analysts and market commentary continued to argue that Microsoft’s AI infrastructure, Azure growth, and OpenAI exposure could support further upside, with some seeing the stock’s weaker recent performance as a buying opportunity. TipRanks: Microsoft Buy Rating Reiterated as AI and Cloud Momentum Builds
• Neutral Sentiment: Microsoft also announced a board addition, appointing former EY chief Carmine Di Sibio to its board of directors, which is a governance update but not an immediate operating catalyst. PR Newswire: Microsoft announces appointment of Carmine Di Sibio to board of directors
• Negative Sentiment: The UK opened an antitrust probe into Microsoft’s business software and cloud practices, creating a potential regulatory overhang for the stock. Reuters: UK opens antitrust probe into Microsoft's business software
• Negative Sentiment: LinkedIn, a Microsoft-owned unit, announced 5% workforce cuts, reinforcing that the company is still trimming costs even as it ramps AI spending. Reuters: LinkedIn to lay off 5% of workforce amid tech industry cuts

Microsoft Company Profile

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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