Microsoft Corporation (MSFT): The Clock Is Ticking

How do you judge Wall Street’s opinion of MSFT stock? You could look at price, sure. But that doesn’t tell the whole story. Short sellers are betting against Microsoft Corporation (NASDAQ:MSFT) during the most recent two-week period. Looking at the sentiment indicator for the MSFT stock we see that the short-interest ratio is at 1.719067 while the average analyst recommendations at 1.6 suggests selling these shares. Between December 31 and January 15, the total number of shorted shares amounted to 58.4 million shares. That was 5.57% more than the total of 55.32 million shares in the space of prior two weeks, which means more traders or funds betting that the stock will go down. Average daily volume for Microsoft Corporation at the January 15th settlement plunged to 33,973,306, as compared to 57,252,976 at the December 31st report. That brought days to cover 71.91% up from the 1 days to cover recorded at the prior short interest data release.

Microsoft Corporation (MSFT) will probably climb 19.04 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $150 price as 12-month high target. This represents a whopping 41.95 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $125, which represents a return potential of 18.29 percent when compared to the closing price of the stock of $105.67 on Friday, February 08. The lowest price target for the stock is $75 — slightly more than -29.02 percent from MSFT’s current share price.

The stock is currently hovering around the first support level of $104.69. Below this, the next support is placed in the zone of $103.72. Till the time, the MSFT stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 50.76 on daily chart, which may remain a cause for concern. If the price breaks below $103.72 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $106.21 mark may result into a pull-back move towards $106.76 level.

On 8th of February, Microsoft Corporation (NASDAQ:MSFT) shares ended higher after a volatile session. The shares accumulated 0.4 points or 0.38 percent at $105.67 with a light trade volume of 21.223 million shares. After opening the session at $104.39, the shares went as high as $105.78 and as low as $104.2603, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $808 billion and now has 7.64 billion shares outstanding. Microsoft Corporation (MSFT) stock has gained 1.34 percent of market value in 21 trading days.

MSFT stock has a trailing 3-year beta of 1.2, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was $4.3 a share in the trailing twelve months. The stock’s value has surged 4.04 percent year to date (YTD) against a rise of 17.92 percent in 12 month’s time. The company’s shares still trade -9.05 percent away from its 1-year high of $116.18 and 26.05 percent up from 52-week low of $83.83. The average consensus rating on the company is 1.6, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a buy.

Shares of Microsoft Corporation (MSFT) are trading at a P/E ratio of 24.58 times earnings reported for the past 12 months. The industry MSFT operates in has an average P/E of 32.02. Its P/E ratio went as low as 15.87X and as high as 29.89 over the 5-year span. Further, it is sporting a 6.82 on the Price-to-Sales ratio. Compare this with the industry average P/S of 8531.25. 65.1 percent is the gross profit margin for Microsoft Corporation and operating margin sits at 32.8 percent. Along with this, the net profit margin is 28.3 percent.

Let’s take a look at some insider activity at Microsoft Corporation (NASDAQ:MSFT) and see the pattern. The earliest insider trade took place on 02/06/2019. Nadella Satya parted with a total of 267.47 thousand shares of company at average share price of $106.01. The total for the sales was set at $28.35 million. After this transaction, the CEO account balance stood at 1.13 million shares. The stock lost -0.32 percent since that insider sale. On 12/10/2018, Capossela Christopher C, EVP, Chief Marketing Officer, sold 4 thousand shares at a price per share of $105.5. This removed 422 thousand shares from the insider’s fortune and the stock saw a 0.16 percent rally in value since the news became public. This transaction left 166.33 thousand shares in the EVP, Chief Marketing Officer account.

On 12/06/2018, EVP, Chief Marketing Officer Capossela Christopher C performed a sale transaction worth $432 thousand. This sale at $108 each has eliminated 4 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded -2.16 percent decrease since the transaction was reported. The insider now is left with 173.93 thousand shares remaining in the account. Capossela Christopher C, who performs the EVP, Chief Marketing Officer job, sold 10 thousand shares for $1.12 million. The disposal occurred on 12/03/2018 was priced at $111.77 per share. The share price plunged -5.46 percent since the reporting date. Capossela Christopher C now left with a stake of 177.93 thousand MSFT stock worth $18.8 million after the insider selling.