ValueAct Still Believes Strongly in Microsoft Corporation (MSFT): Here’s Why

Almost instantly, perceptions began changing, and Microsoft Corporation (NASDAQ:MSFT)’s stock was up 40% at the end of 2013 from where it was at the beginning of the year, as ValueAct pushed them to focus on enterprise software and business services. That helped spur ValueAct to another impressive year, returning nearly 30% net of fees in 2013. Microsoft’s stock followed that up with another strong year in 2014, rising nearly 30%.

Part of new Microsoft Corporation (NASDAQ:MSFT) CEO Satya Nadella’s move on the enterprise front has been the shift into mobile and cloud computing, as well as moving some of Microsoft’s business software such as Office off Windows and onto competitor’s platforms, including those of Apple Inc. (NASDAQ:AAPL)and Google Inc (NASDAQ:GOOGL).

While those moves have gained praise for the new CEO, ValueAct certainly deserves their fair share as well for being a key catalyst in helping spur Microsoft’s turnaround and showing them and the world how they could succeed. Their influence on Microsoft with less than 1% ownership of the company shows the growing power of activist investing, and how invaluable it can be for both companies and other shareholders, and why it’s become so important as an investor to track the involvement of hedge funds in ownership of stock. In Microsoft’s case, ValueAct clearly believes there is still further upward momentum and growth in store for the company as they continue to transition to and build upon their new model, which investors should take note of.

Other hedge funds we track with positions in Microsoft Corporation (NASDAQ:MSFT) include Donald Yacktman’s Yacktman Asset Management with 56.46 million shares, First Eagle Investment Management with 36.29 million shares, and Boykin Curry‘s Eagle Asset Management with 32.86 million shares.

Disclosure: None