Sizing Up Shares of Microsoft Corporation (NASDAQ:MSFT): What is the Data Telling Us? - Wagner Review

Stock market investing can sometimes cause investors heads to spin. Following stocks on a daily basis, it is plain to see the amount of coverage that follows certain companies. This non-stop barrage of information may eventually become overwhelming for the novice investor. Filtering through all the data may involve taking a look at a company or stock from multiple angles. There are many investors out there that preach strictly following fundamental data. There are others that swear by the technical analysis. Many investors will opt to employ a research strategy that involves pieces of the two approaches. Knowing every little detail about a company may not be overly necessary, but it may help provide a bit more direction when navigating the stock market maze. Investors who put in the time to study all the fundamentals may want to also start watching the charts on stock that they are thinking about adding to the portfolio. Making sure that no stone is left unturned when examining a stock may end up being the difference between a big winner and a big loser.

Making ones way through the equity markets can be highly challenging. Investors might be reviewing strategies to see what has worked and what hasn’t worked in the past. After studying the broader economic factors that impact equity markets, it may be time to focus in on specific stocks to add to the portfolio. Investors may examine different sectors first in order to figure out where the majority of the growth potential lies. Doing all the necessary research on sectors can help pinpoint where the next major trend will be forming. This study may not lead to exact findings, but it may provide a better framework with which to operate moving forward in the stock market. Finding those big winners can take a lot of time and effort. Digging through the numbers may be cumbersome at times, but the rewards for sticking with it and putting in the work may pay off greatly down the line. Staying on top of economic news and the fundamentals of stocks in the portfolio on a consistent basis can help the investor better traverse the often rocky terrain that is the stock market.

Microsoft Corporation (NASDAQ:MSFT), of the Technology sector recently touched $131.40 based on a recent trade, indicating movement of 2.80%. Analysts are predicting earnings per share growth of 19.30% for the current year. The earnings per share growth over the next five years are expected to be 14.80%. Microsoft Corporation has had earnings per share growth of 8.50% over the past five years.

Currently the return on equity is 39.30% and its debt to equity is 0.83. Microsoft Corporation has a total market cap of $1006416.21, a gross margin of 65.40% while the profit margin is 28.60% and the ROI is 17.60%.

Performance

The stats on Microsoft Corporation (NASDAQ:MSFT) are currently as follows. The weekly performance is 6.24%, and the quarterly performance is at 18.90%. The monthly performance is 4.69% and the yearly performance is 4.69%. The performance for Year to Date (YTD) is 29.37%.

Microsoft Corporation has posted a trailing 12 months earnings per share of $4.49 and the earnings per share growth for this year is expected to be 19.30%. The ROI is 17.60% and the return on equity for Microsoft Corporation stated earlier, is currently at 39.30% .The return on assets (ROA) for Microsoft Corporation is 13.50%.

Earnings per share (EPS) the amount of income that “belongs” to each share of common stock. This is a valuable tool that investors use to determine the value and projected value of a stock. Earnings per share is generally reported in annualized form from the most recent fiscal year. To determine the value, the average number of shares outstanding is usually calculated by averaging the number of shares at the beginning of the fiscal period and the number of shares at the end of the period.

Price Earnings Ratio

The price/earnings ratio (P/E) for Microsoft Corporation is 29.30 and the forward P/E ratio stands at 25.73. The price to sales growth is 8.24. The price/earnings ratio (P/E) is a market prospect ratio which calculates the value of a stock relative to its earnings. On other words, the P/E ratio is and indicator of what investors are will to pay for a stock relative to its earnings. A firm with a high P/E ratio typically indicates that investors are willing to pay a premium for the stock and higher performance in future quarters would be anticipated. Going a step further we can also look at the PEG ratio of a company. A stock’s price/earnings ratio divided by its year-over-year earnings growth rate. In general, the lower the PEG, the better the value, because the investor would be paying less for each unit of earnings growth.

Technicals

The technical stats for Microsoft Corporation are as follows. Microsoft Corporation (NASDAQ:MSFT) is trading 39.85% away from the stock’s 52-week low and 0.02% off of the 52-week high. Current levels place the company 4.53% away from it’s 20-day simple moving average. The average volume stands around 33766780. Trading volume is a hugely important consideration for any investor. By watching how many shares are trading hands and looking for any changes in that activity, trading opportunities can be spotted along with a deeper understanding of the reliability of other indicators on the stock. A significant increase in trading volume means that more than double the average amount of stocks are moving. When volume is decreased significantly, it may indicate there is an issue that shareholders should watch out for. It’s also important to take into consideration how long the unusual volume sustains for. If it’s only the one trading day, it can be dismissed as an anomaly.

The current stock levels place it 16.89% away from the 200 day moving average. Microsoft Corporation has a beta of 1.23 and the weekly and monthly volatility stands at 2.60% and 1.86% respectively. The simple moving average is the most common method used to calculate the moving average of prices. It takes the sum of all of the past closing prices over a specific time period and divides the result by the number of prices used in the calculation. Increasing the number of time periods in the calculation is an effective way to ascertain the strength of the long-term trend and/or the likelihood that it might reverse. Some argue that this type of average is not necessarily useful because each data point in the series has the exact same impact on the result no matter where it occurs in the sequence.

The amount of financial information available to individual investors these days is staggering. Accumulating intelligence in the stock market is much easier to do than ever before. All the advances in technology have allowed regular investors to access information with relative ease. Making sense of all the various data can be overwhelming, but plowing through the data may create a solid foundation to start enhancing profits in the market. With so many investing options, traders and investors need to construct a plan that works specifically for them. Becoming educated about the stock market before tackling the beast might assist the individual investor in many ways. Studying how markets and prices move may help the investor decide which way is the best way to go. Understanding the difficulties and possible pitfalls that investors generally fall prey to, can go a long way in helping even before the first trade is ever made. As most investors know, the markets and economic landscapes are constantly changing. This requires the investor to be in tip top mental shape in order to confront tough buy or sell decisions when the time comes.

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.

Disclaimer: The views of the author are in no way suggesting whether or not to buy a stock. Data is provided by Yahoo Finance.

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