Hedge Funds Are Still Piling Into Microsoft Corporation (MSFT)

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Is Microsoft Corporation (NASDAQ:MSFT) a good stock to buy right now? We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.” data-reactid=”11″>Is Microsoft Corporation (NASDAQ:MSFT) a good stock to buy right now? We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Is Microsoft Corporation (NASDAQ:MSFT) the right pick for your portfolio? The best stock pickers are turning bullish. The number of bullish hedge fund bets rose by 6 recently. Our calculations also showed that MSFT&nbsp;ranked #2 among the 30 most popular stocks among hedge funds (see the video below for previous rankings). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.” data-reactid=”12″>Is Microsoft Corporation (NASDAQ:MSFT) the right pick for your portfolio? The best stock pickers are turning bullish. The number of bullish hedge fund bets rose by 6 recently. Our calculations also showed that MSFT ranked #2 among the 30 most popular stocks among hedge funds (see the video below for previous rankings). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

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<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.” data-reactid=”25″>Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.

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<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Let's take a glance at the new hedge fund action regarding Microsoft Corporation (NASDAQ:MSFT).” data-reactid=”37″>Let’s take a glance at the new hedge fund action regarding Microsoft Corporation (NASDAQ:MSFT).

How have hedgies been trading Microsoft Corporation (NASDAQ:MSFT)?

At the end of the third quarter, a total of 173 of the hedge funds tracked by Insider Monkey were long this stock, a change of 4% from one quarter earlier. By comparison, 170 hedge funds held shares or bullish call options in MSFT a year ago. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).

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<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The largest stake in Microsoft Corporation (NASDAQ:MSFT) was held by Fisher Asset Management, which reported holding $2969.5 million worth of stock at the end of March. It was followed by Eagle Capital Management with a $2625.1 million position. Other investors bullish on the company included Tiger Global Management, AQR Capital Management, and Adage Capital Management. In terms of the portfolio weights assigned to each position Joho Capital allocated the biggest weight to Microsoft Corporation (NASDAQ:MSFT), around 21.9% of its portfolio. Duquesne Capital is also relatively very bullish on the stock, setting aside 21.6 percent of its 13F equity portfolio to MSFT.” data-reactid=”51″>The largest stake in Microsoft Corporation (NASDAQ:MSFT) was held by Fisher Asset Management, which reported holding $2969.5 million worth of stock at the end of March. It was followed by Eagle Capital Management with a $2625.1 million position. Other investors bullish on the company included Tiger Global Management, AQR Capital Management, and Adage Capital Management. In terms of the portfolio weights assigned to each position Joho Capital allocated the biggest weight to Microsoft Corporation (NASDAQ:MSFT), around 21.9% of its portfolio. Duquesne Capital is also relatively very bullish on the stock, setting aside 21.6 percent of its 13F equity portfolio to MSFT.

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