Is the New Microsoft Corporation (MSFT) / Samsung Internet of Things Marriage Good for Shareholders?


Today at CES 2016, Samsung showed off several interesting aspects of their “Internet of Things” (IoT) push. One of these aspects included a partnership of sorts with Microsoft Corporation (NASDAQ:MSFT) that combines Windows 10 with a Samsung mobile devices to connect with Samsung’s other IoT devices such as TVs, refrigerators, washing machines and dryers.

Samsung uses Microsoft Corporation’s (NASDAQ:MSFT) virtual assistant, called Cortana, combined with Windows 10 in order to inform a user if their washing machine is done, as well as to analyze usage trends, and more.

This is quite the interesting partnership, to say the least, but in our eyes it could be quite beneficial to both companies, if successful. Microsoft Corporation (NASDAQ:MSFT) has long been known for their software innovation, and Samsung is one of the top hardware manufacturers for mobile devices. The combination of the two companies’ intellectual property and innovation can only mean good things for investors.

“With Samsung, we’re excited to have this shared vision of millions and millions of devices and things communicating using open protocols and open standards, creating opportunity for software developers, device manufacturers and rising-star makers around the world,” Myerson said during the Samsung keynote at CES 2016.

The stock is down 2.68% or $1.45 following the news, hitting $52.6 per share. About 40.92 million shares traded hands or 15.86% up from the average. MSFT has risen 15.37% since June 3, 2015 and is uptrending. It has outperformed the S&P500 by 21.22%.

From a total of 16 analysts covering Microsoft Corporation (NASDAQ:MSFT) stock, 12 rate it a “Buy”, 1 a “Sell”, and 3 a “Hold”. This means that 75% of the ratings are positive. The highest target price is $65 while the lowest target price is $20. The mean of all analyst targets is $53.68 which is 2.05% above today’s ($52.6) stock price. Microsoft Corporation was the topic of 34 analyst reports since July 22, 2015 according to the firm StockzIntelligence Inc. Barclays Capital maintained shares on January 6 with a “Overweight” rating. Vetr upgraded shares to a”Strong-Buy” rating and a $47.60 target share price in their report from a September 2. Goldman Sachs upgraded MSFT stock in a recent report from December 18 to a “Neutral” rating. Global Equities Research maintained the rating on August 28. Global Equities Research has a “Overweight” rating and a $50 price target on shares. Finally, Raymond James upgraded the stock to a “Strong Buy” rating in a report they issued on a November 30.

The institutional sentiment increased to 1.08 in Q2 2015. It’s up 0.32, from 0.76 in 2015Q2. The ratio is positive, as 69 funds sold all their Microsoft Corporation shares they owned while 801 reduced their positions. 93 funds bought stakes while 843 increased their total positions. Institutions now own 5.20 billion shares which is 8.27% less than the previous share count of 5.67 billion in 2015Q2.

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

Since April 28, 2015, the stock had 0 insider purchases, and 4 sales for a total of $370.34 million in net activity. Gates William H Iii sold 4.00 million shares worth $185.75 million. Turner Brian Kevin sold 69,158 shares worth $3.16 million. Capossela Christopher C sold 4,485 shares worth $218,464. Brod Frank H sold 4,500 shares worth $215,294.

Microsoft Corporation is engaged in developing, licensing and supporting a range of software services and products. The company has a market cap of $429.79 billion. The Firm also creates and sells hardware, and delivers online advertising to the customers. It has 35.34 P/E ratio. The Firm operates in five divisions: Devices and Consumer Licensing, D&C Hardware, D&C Other, Commercial Licensing, and Commercial Other.