Is There a Catalyst Out There For Microsoft Corporation (NASDAQ:MSFT) - Augusta Review

Strategic investors have taken a closer look of late at shares of Microsoft Corporation (NASDAQ:MSFT). Given the cheap price, many are wondering if there is now value and potential upside to the name. During the most recent session, shares touched $112.53 after moving -0.32%.

Doing standard fundamental stock analysis is fairly straightforward. These days, investors have easy access to large amounts of available data. The biggest problem for the average investor may be dedicating the time to actually doing the research. One goal of studying the fundamentals is to establish the true value of a stock compared to how it is currently trading in the marketplace. Many investors believe that identifying quality stocks should be a cornerstone of portfolio construction. Obtaining as much knowledge as possible about a stock can help make the buying decisions a little easier. Some investors may trust other people or products to do the required research, but others may wish to roll up the sleeves and do all the analysis themselves.

After a recent check, shares of Microsoft Corporation (NASDAQ:MSFT) have been seen trading -0.63% off of the 50-day high and 19.76% away from the 50-day low. In terms of the stock price in relation to its moving averages, company shares are 4.43% away from the 20-day moving average and 7.26% off of the 50-day average. If we take a wider approach, shares have been trading 6.17% away from the 200-day moving average.

Over the last year, Microsoft Corporation (NASDAQ:MSFT)’s stock has performed 20.01%. For the last six months, the stock has performed 2.06%. From the start of the calendar year, shares have been 10.79%. Zooming in closer, company stock has been 5.03% for the quarter, 5.78% over the past month, and 1.41% over the past week.

Beta is used to measure a stock’s price volatility relative to the market. A stock with a beta of “0” indicates that its price is not correlated with the market. A positive beta indicates that the stock follows the market. A negative beta means that the stock inversely follows the market, decreasing in value when the market goes up. Microsoft Corporation (NASDAQ:MSFT) current has a Beta score of 1.20.

FUNDAMENTAL ANALYSIS

Investors might be preparing to do a portfolio evaluation as we move towards the close of the year. There may be plenty of big winners from the first half of the year, but there may also be some underperformers that need to be reviewed. Making sure that the portfolio stays in balance can help prepare the investor for success over the next few quarters. With the stock market still riding high, investors may be wondering how to play the market into the near future. If market momentum starts to shift, investors may need to be ready to make some tougher decisions. Being prepared for any market situation can help the investor cope with rough waters when the time comes.

Earnings Per Share (EPS) is the earnings made by a company divided by their number of shares. EPS enables the earnings of a company to easily be compared to their competitors. The higher the number, the more profit per dollar is being made on investor capital. Microsoft Corporation’s EPS is 4.30. Their EPS should be compared to other companies in the Technology sector.

Price-to-Earnings Ratio is the current share price divided by annual earnings per share. P/E provides a number that details how many years of earnings it will take a stock to recoup the value of one share at current price levels. Easy to calculate and understand, P/E is an extremely common ratio that is used to compare valuations of stocks against each other relatively. Microsoft Corporation’s P/E ratio is 26.17.

Projected Earnings Growth (PEG) is a forward looking ratio based on anticipated earnings growth. PEG is created by dividing P/E by the projected rate of earnings growth. Microsoft Corporation’s PEG is 1.87.

RETURNS AND RECOMMENDATION

Shareholders can expect a return on equity of 39.50%. Calculated by dividing Microsoft Corporation’s annual earnings by its total assets, investors will note a return on assets of 13.10%. Finally, Microsoft Corporation’s return on investment stands at 17.60% when you divide the shareholder’s return by the cost. The consensus analysts recommendation at this point stands at 1.70 for Microsoft Corporation (NASDAQ:MSFT). This is based on a 1-5 scale where 1 indicates a Strong Buy and 5 a Strong Sell.

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