Why Microsoft Corporation (NASDAQ: MSFT) Is A Great Stock Pick For Momentum Investors

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Microsoft Corporation (NASDAQ:MSFT) shares, rose in value on Thursday, July 22, with the stock price up by 1.68% to the previous day’s close as strong demand from buyers drove the stock to $286.14.

Actively observing the price movement in the last trading, the stock closed the session at $281.40, falling within a range of $283.42 and $286.42. The value of beta (5-year monthly) was 0.79 whereas the PE ratio was 38.94 over 12-month period. Referring to stock’s 52-week performance, its high was $284.10, and the low was $196.25. On the whole, MSFT has fluctuated by 7.77% over the past month.

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With the market capitalization of Microsoft Corporation currently standing at about $2157.24 billion, investors are eagerly awaiting this quarter’s results, scheduled for Jul 20, 2021 – Jul 26, 2021. The company’s Forward Dividend Ratio is 2.24, with its dividend yield at 0.78%. As a result, investors might want to see an improvement in the stock’s price before the company announces its earnings report. Analysts are projecting the company’s earnings per share (EPS) to be $1.9, which is expected to increase to $2.05 for fiscal year $7.77 and then to about $8.37 by fiscal year 2022. Data indicates that the EPS growth is expected to be 34.90% in 2022, while the next year’s EPS growth is forecast to be 7.70%.

Analysts have estimated the company’s revenue for the quarter at $44.1 billion, with a low estimate of $40.85 billion and a high estimate of $44.91 billion. According to the average forecast, sales growth in current quarter could jump up 16.00%, compared to the corresponding quarter of last year. Wall Street analysts also predicted that in 2022, the company’s y-o-y revenues would reach $166.18 billion, representing an increase of 16.20% from the revenues reported in the last year’s results.

Revisions could be a useful indicator to get insight on short-term price movement; so for the company, there were no upward and no downward review(s) in last seven days. We see that MSFT’s technical picture suggests that short-term indicators denote the stock is a 100% Buy on average. However, medium term indicators have put the stock in the category of 100% Buy while long term indicators on average have been pointing out that it is a 100% Buy.

38 analyst(s) have assigned their ratings of the stock’s forecast evaluation on a scale of 1.00-5.00 to indicate a strong buy to a strong sell recommendation. The stock is rated as a Hold by 3 analyst(s), 32 recommend it as a Buy and 3 called the MSFT stock Overweight. In the meantime, 0 analyst(s) believe the stock as Underweight and 0 think it is a Sell. Thus, investors eager to increase their holdings of the company’s stock will have an opportunity to do so as the average rating for the stock is Buy.

The stock’s technical analysis shows that the PEG ratio is about 2.26, with the price of MSFT currently trading nearly 3.85% and 9.60% away from the simple moving averages for 20 and 50 days respectively. The Relative Strength Index (RSI, 14) currently indicates a reading of 72.41, while the 7-day volatility ratio is showing 1.62% which for the 30-day chart, stands at 1.31%. Furthermore, Microsoft Corporation (MSFT)’s beta value is 0.78, and its average true range (ATR) is 4.12. The company’s stock has been forecasted to trade at an average price of $303.28 over the course of the next 52 weeks, with a low of $256.70 and a high of $378.00. Based on these price targets, the low is 10.29% off current price, whereas the price has to move -32.1% to reach the yearly target high. Additionally, analysts’ median price of $300.00 is likely to be welcomed by investors because it represents a decrease of -4.84% from the current levels.

A comparison of Microsoft Corporation (MSFT) with its peers suggests the former has fared considerably weaker in the market. MSFT showed an intraday change of 1.68% in last session, and over the past year, it grew by 35.13%%. In comparison, Oracle Corporation (ORCL) has moved higher at 1.11% on the day and was up 61.92% over the past 12 months. On the other hand, the price of Alphabet Inc. (GOOGL) has risen 0.68% on the day. The stock, however, is off 64.13% from where it was a year ago. Additionally, there is a gain of 0.96% for Apple Inc. (AAPL) in last trading while the stock has seen an overall depriciation of 50.92%% over the past year. The PE ratio stands at 38.94 for Microsoft Corporation, compared to 19.83 for Oracle Corporation, and 32.48 for Alphabet Inc. Other than that, the overall performance of the S&P 500 during the last trading session shows that it gained 0.20%. Meanwhile, the Dow Jones Industrial Improved by 0.07%.

Data on historical trading for Microsoft Corporation (NASDAQ:MSFT) indicates that the trading volumes over the past 10 days have averaged 25.06 million and over the past 3 months, they’ve averaged 24.87 million. According to company’s latest data on outstanding shares, there are 7.54 billion shares outstanding.

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Nearly 0.10% of Microsoft Corporation’s shares belong to company insiders and institutional investors own 72.10% of the company’s shares. The data on short interest also indicates that stock shorts accounted for 48.14 million shares as on Jun 14, 2021, resulting in a short ratio of 2.24. According to the data, the short interest in Microsoft Corporation (MSFT) stood at 0.64% of shares outstanding as of Jun 14, 2021; the number of short shares registered in May 13, 2021 reached 40.53 million. The stock has risen by 28.65% since the beginning of the year, thereby showing the potential of a further growth. This could raise investors’ confidence to be optimistic about the MSFT stock heading into the next quarter.