The Microsoft Corporation (NASDAQ:MSFT) has rewarded its shareholders with asset appreciation of more than 20% for the year despite an overall market decline that drove many other stocks into negative territory for the trailing 12-month period.
Speculation about the Federal Reserve’s interest rate adjustments and fears of a government shutdown partially drove the general market decline that culminated with the market and many stocks bottoming out on Christmas Eve 2018. While Microsoft’s share price dipped in the last quarter of 2018, the company’s closing price on December 24, 2018, was still 7% above the price level from the onset of the 12-month period, as well as nearly 11% higher than MSFT’s 52-week low that occurred in early February 2018.
However, Microsoft’s share price recovered enough to deliver a double-digit-percentage gain for the trailing year. More Wall Street analysts had a “Hold” stock recommendation for MSFT in February (6) than they did in January (1). However, nearly 80% of the analysts currently covering the stock — 27 out of 34 — still have a “Buy” or “Strong Buy” recommendation. Furthermore, Microsoft’s current share price has 17.4% room on the upside before it reaches the current analysts’ average target price of $125.70.
Also, after trading above its moving averages for more than two years, the share price dipped below the 50-day moving average (MA) in early October and below the 200-day MA in mid-December 2018. The late-2018 price decrease drove down the 50-day MA marginally below the 200-day MA by the beginning of February 2019. However, with the share price back above both moving averages, interested investors should be on the lookout for the 50-day MA to breach back above the 200-day MA and continue rising, which would indicate a potentially sustainable share price uptrend, at least in the near term.
Microsoft Corporation (NASDAQ:MSFT)
Founded in 1975 and headquartered in Redmond, Washington, the Microsoft Corporation develops, licenses and supports software products, services and devices worldwide. The company’s Productivity and Business Processes segment offers Office 365 commercial products and services for businesses, including Office, Exchange, SharePoint, Skype for Business and related Client Access Licenses (CALs). Additionally, this segment provides consumer productivity Office suite of applications, as well as the Office 365 consumer services, such as Skype, Outlook.com and OneDrive. The Dynamics segment provides business applications for financial management, enterprise resource planning, customer relationship management, supply chain management and the LinkedIn online professional network.
The Intelligent Cloud segment licenses server products and cloud services, such as Microsoft SQL Server, Windows Server, Visual Studio and System Center, as well as Azure, a cloud platform with computing, networking, storage, database and management services. Additionally, this segment provides the Premier Support and Microsoft Consulting enterprise services, which assist in developing, deploying, and managing Microsoft server and desktop solutions. Training and certification to developers and IT professionals on Microsoft products are also part of the Intelligent Cloud segment. Microsoft’s More Personal Computing segment comprises licensing of the Windows operating system to Original Equipment Manufacturers (OEM), patent licensing, Windows Internet of Things, MSN display advertising and Windows Phone licensing. Additionally, this segment designs and manufactures electronic devices that include the Microsoft Surface tablet devices, phones and PC accessories, as well as search and advertising through the company’s Bing and Bing Ads platforms. This segment also provides gaming platforms, including Xbox hardware, Xbox Live and video games.
The share price began its trailing 12 months from its 52-week low of $85.01 on February 8, 2018. From this low, the share price advanced 36% and reached its new all-time high of $115.61 on October 1, 2018, before declining for the rest of the year. However, since reversing its trend on Christmas Eve 2018, the share price has regained more than 60% of its losses from the October peak and closed on February 5, 2019, at $107.22, which was just 7.3% below the October 2018 all-time high. The February 5, 2019, closing price was also nearly 21% higher than one year earlier, more than 26% above the 52-week low from February 2018 and 185% higher than it was five years ago.
This robust share price growth and Microsoft’s dividend income combined to deliver a total return of nearly 24% over the past 12 months. Additionally, the company also rewarded its shareholders with long-term total returns of 113% over the past three years and 212% over the past five years.
Founded in 1916 in Seattle, Washington, and currently headquartered in Chicago, Illinois, The Boeing Company designs, develops, manufactures, sells and services commercial and military aircrafts, satellites, missile defense systems, space flight vehicles and launch systems. The company operates through five business segments – Commercial Airplanes, Boeing Military Aircraft, Network & Space Systems, Global Services & Support and Boeing Capital.
Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.