Stock Traders Increase Call Options in Microsoft (NASDAQ:MSFT)

Microsoft Co. (NASDAQ:MSFT - Get Free Report) experienced a notable surge in unusual options trading on Tuesday. Investors purchased a total of 355,575 call options for the company, marking a significant increase of 29% compared to its average daily volume of 274,666 call options.

Insider Activity at Microsoft

In other news regarding Microsoft, CEO Satya Nadella sold 14,398 shares of the company's stock on August 23rd at an average price of $417.41. This sale totaled approximately $6,009,869.18. Post-transaction, Nadella retains ownership of 786,933 shares, valued at around $328,473,703.53. This sale represents no change in his ownership percentage.

Additionally, insider Bradford L. Smith sold 40,000 shares on September 9th, with the shares being sold at an average price of $402.59, bringing in a total of $16,103,600. Following this transaction, Smith now directly owns 544,847 shares, worth about $219,349,953.73. This sale also reflects no change in ownership percentage. Overall, insiders have sold 190,629 shares of Microsoft stock in the past three months, amounting to $77,916,485 in value, with corporate insiders owning just 0.03% of total stock.

Recent Hedge Fund Activity

Several institutional investors have recently altered their holdings in Microsoft. Banque Cantonale Vaudoise increased its stake by 1.8% in the first quarter, now owning 282,295 shares valued at $118,766,000. Wedmont Private Capital raised its position by 5.1%, holding 80,247 shares worth $34,208,000. Bank of New Hampshire also boosted its stake by 15.5%, owning 36,567 shares worth $15,384,000. Grassi Investment Management and Grandview Asset Management also made slight increases in their holdings. Notably, 71.13% of Microsoft's stock is owned by hedge funds and other institutional investors.

Analysts Project Positive Outlook

Several Wall Street analysts have recently updated their ratings for Microsoft shares. TD Cowen changed their target price from $470.00 to $495.00 with a “buy” rating on July 18th. Royal Bank of Canada reaffirmed an “outperform” rating and a $500.00 price target on July 31st. Wells Fargo continues to rate Microsoft as a “buy.” On the other hand, Citigroup reduced its target from $520.00 to $500.00 while maintaining their “buy” recommendation. Overall, analysts generally have a positive outlook, with the average price target for Microsoft shares currently at $495.68 and a consensus rating of “Moderate Buy.”

Current Performance of Microsoft Stock

On Tuesday, the stock price of NASDAQ MSFT rose by 2.1%, trading up $8.73 to reach $427.51 during midday trading. The trading volume hit 23,863,133 shares, exceeding the average volume of 20,286,785. Microsoft’s moving averages stand at $419.90 for the 50-day and $424.55 for the 200-day. The company’s debt-to-equity ratio is 0.16, with both current and quick ratios at 1.27. Over the past year, Microsoft shares have seen a low of $324.39 and a high of $468.35. Notably, the software giant has a market cap of $3.18 trillion.

In its most recent earnings report on July 30th, Microsoft disclosed earnings per share (EPS) of $2.95, surpassing analyst expectations of $2.90. The company reported revenue of $64.73 billion for the quarter, showing a substantial year-over-year increase of 15.2%. Analysts predict an EPS of 13.02 for Microsoft for the current year.

Share Repurchase Announcement

On September 16th, Microsoft's board authorized a significant share repurchase plan that allows the company to repurchase up to $60.00 billion of its outstanding shares. This decision indicates that the board believes the shares are undervalued, as repurchase plans generally suggest confidence in the company's future.

Dividend Increase Notification

Microsoft also announced a quarterly dividend of $0.83 per share, payable on December 12th to shareholders on record as of November 21st. This represents an increase from the previous quarterly dividend of $0.75, equating to an annualized dividend of $3.32 and a yield of 0.78%. The payout ratio for Microsoft currently stands at 28.74%.

Company Overview

Microsoft Corporation is a leading global developer and vendor of software, services, devices, and solutions. Its offerings include a diverse range of products and services catering to various industries and consumer needs.

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