A Reversal for Microsoft Corporation Is Not Near. Professional Options Traders Are Bearish

In today’s session Microsoft Corporation (MSFT) recorded an unusually high (276) contracts volume of put trades. Someone, most probably a professional was a very active buyer of the April, 2016 put, expecting serious MSFT decrease. With 276 contracts traded and 17524 open interest for the Apr, 16 contract, it seems this is a quite bearish bet. The option with symbol: MSFT160415P00056500 closed last at: $2.19 or 5.2% down. The stock decreased 0.07% or $0.04 on April 8, hitting $54.42. Microsoft Corporation (NASDAQ:MSFT) has risen 25.51% since September 2, 2015 and is uptrending. It has outperformed by 20.44% the S&P500.

Analysts await Microsoft Corporation (NASDAQ:MSFT) to reports earnings on April, 28. They expect $0.64 earnings per share, up 3.23% or $0.02 from last year’s $0.62 per share. MSFT’s profit will be $5.06B for 21.26 P/E if the $0.64 EPS becomes reality. After $0.78 actual earnings per share reported by Microsoft Corporation for the previous quarter, Wall Street now forecasts -17.95% negative EPS growth.

Out of 32 analysts covering Microsoft Corporation (NASDAQ:MSFT), 21 rate it “Buy”, 3 “Sell”, while 11 “Hold”. This means 60% are positive. $70 is the highest target while $37 is the lowest. The $58.8 average target is 5.11% above today’s ($54.42) stock price. Microsoft Corporation was the topic in 49 analyst reports since July 22, 2015 according to StockzIntelligence Inc. Cowen & Co maintained the stock on April 1 with “Market Perform” rating. UBS maintained the shares of MSFT in a report on January 29 with “Buy” rating.

The institutional sentiment increased to 1.08 in 2015 Q3. Its up 0.32, from 0.76 in 2015Q2. The ratio improved, as 69 funds sold all Microsoft Corporation shares owned while 801 reduced positions. 93 funds bought stakes while 843 increased positions. They now own 5.20 billion shares or 8.27% less from 5.67 billion shares in 2015Q2.

Cook & Bynum Capital Management Llc holds 25.5% of its portfolio in Microsoft Corporation for 717,081 shares. Rwwm Inc. owns 895,414 shares or 19.69% of their US portfolio. Moreover, Valueact Holdings L.P. has 19.37% invested in the company for 75.27 million shares. The California-based Smithwood Advisers L.P. has invested 17.28% in the stock. Deccan Value Investors L.P., a Connecticut-based fund reported 2.26 million shares.

Microsoft Corporation is engaged in developing, licensing and supporting a range of software services and products. The company has a market cap of $430.11 billion. The Firm also creates and sells hardware, and delivers online advertising to the customers. It has 38.75 P/E ratio. The Firm operates in five divisions: Devices and Consumer Licensing, D&C Hardware, D&C Other, Commercial Licensing, and Commercial Other.

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