Spear Holdings Reduces Microsoft Stake by 58.5% Amid Institutional Changes

Spear Holdings RSC Ltd has significantly reduced its stake in Microsoft Corporation (NASDAQ:MSFT) by 58.5% during the second quarter of 2023, according to a recent filing with the U.S. Securities and Exchange Commission (SEC). The firm now holds 174,500 shares of Microsoft after selling 246,100 shares in the quarter. This adjustment leaves Microsoft comprising 6.4% of Spear Holdings’ portfolio, making it the fifth-largest position within the fund.

As of the latest filing, Spear Holdings’ holdings in Microsoft were valued at approximately $86.8 million. This move comes amid a broader trend of institutional investors adjusting their positions in Microsoft, a company renowned for its software products and cloud services.

Institutional Investor Activity

Several other institutional investors have also modified their holdings in Microsoft recently. Newton One Investments LLC increased its stake by 66.7% in the first quarter, now owning 75 shares valued at $28,000 after acquiring an additional 30 shares. Meanwhile, Bulwark Capital Corp made a new investment in Microsoft during the second quarter, estimated at around $32,000.

In a dramatic shift, Westend Capital Management LLC raised its position in Microsoft by 386.7% during the same period, now owning 73 shares worth approximately $36,000. Other notable changes include LSV Asset Management, which also established a new stake valued at about $44,000, and ROSS JOHNSON & Associates LLC, which boosted its holdings by 155.7% in the first quarter, resulting in ownership of 156 shares valued at $59,000. Currently, institutional investors, including hedge funds, own 71.13% of Microsoft’s stock.

Insider Transactions and Analyst Ratings

In related news, Microsoft’s Executive Vice President, Takeshi Numoto, sold 4,850 shares on August 12, 2023, at an average price of $527.32, totaling $2,557,502. Following this transaction, Numoto holds 39,111 shares, valued at approximately $20.6 million. This sale reflects an 11.03% decrease in his ownership.

Similarly, CEO Satya Nadella sold 149,205 shares on September 3, 2023, for nearly $75.3 million, which reduced his ownership by 15.87%. Insiders currently hold just 0.03% of Microsoft’s stock.

Analysts have been bullish on Microsoft, with several recent upgrades. Loop Capital raised its target price from $550 to $600 and maintained a “buy” rating. Sanford C. Bernstein increased its price objective from $540 to $637, while Bank of America raised its target from $585 to $640. Overall, there is a strong consensus among analysts, with one rating the stock as a “Strong Buy,” thirty-five as a “Buy,” and one as a “Hold.” The average analyst rating for Microsoft is “Buy,” with a consensus price target of $626.58.

Microsoft’s stock opened at $541.55 on Thursday, reflecting a market capitalization of $4.03 trillion. The company reported a 39.70 price-to-earnings ratio and has experienced a 12-month low of $344.79 and a high of $555.45.

In its most recent earnings report on October 29, 2023, Microsoft posted an earnings per share (EPS) of $4.13, surpassing analysts’ expectations of $3.65. The company also reported a 36.15% net margin and a revenue increase of 18.4% compared to the same quarter last year.

Dividend Announcement

Additionally, Microsoft announced a quarterly dividend of $0.91, which is set to be distributed on December 11, 2023, to shareholders on record by November 20, 2023. This marks an increase from the previous dividend of $0.83, bringing the annualized dividend to $3.64 and yielding 0.7%. The ex-dividend date is also scheduled for November 20, 2023, and the company maintains a dividend payout ratio of 24.34%.

Microsoft continues to be a dominant player in the technology sector, consistently adapting its strategies and maintaining its market position despite fluctuations in investor sentiment.