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Bridgewater Increases Position in Microsoft Corporation

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Bridgewater Associates and Microsoft Corporation

In 4Q14, Bridgewater Associates increased its position in Microsoft Corporation (MSFT) by over $26 million in stock. Bridgewater had held 14,645 MSFT shares in 3Q14, representing 0.01% of its third-quarter portfolio. In 4Q14, the fund held 601,045 shares of Microsoft, which accounted for 0.22% of Bridgewater’s total fourth quarter portfolio.

Bridgewater Associates also reduced its position in Apple (AAPL) and raised its stake in Gilead Sciences (GILD) during the fourth quarter.

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Overview of Microsoft Corporation

Microsoft Corporation develops and markets a range of software, services, and devices. The company’s offerings include the following products:

  • operating systems for computers, servers, phones, and other intelligent devices
  • server applications for distributed computing environments
  • productivity applications
  • business solution applications
  • desktop and server management tools
  • software development tools
  • video games
  • online advertising

MSFT also designs and sells various hardware:

  • personal computers
  • tablets
  • gaming and entertainment consoles
  • phones
  • other intelligent devices
  • related accessories

2Q15 results

For the second quarter of 2015, Microsoft reported revenue of $26.5 billion, up 8% on a year-over-year (or YoY) basis. Cloud services and devices mainly drove this increase, while a 13% decline in both Windows OEM Pro and non-Pro revenue partially offset it.

Commercial cloud revenue grew 114%, representing its sixth consecutive quarterly triple-digit growth. Office 365, Azure, and Dynamics CRM Online drove this increase. Devices and consumer revenue grew 8% to $12.9 billion driven by Microsoft Surface and search advertising.

Operating income for 2Q15 was $7.8 billion compared to $7.97 billion in 2Q14. 2Q15 results included $243 million in charges related to the integration of the Nokia devices and services business.

Diluted earnings per share were $0.71 compared to $0.78 in 2Q14.

Shareholder value

During the quarter, Microsoft increased its capital return by 5%. The company returned $4.5 billion to its shareholders through buybacks and dividends. Microsoft expects to complete its share buyback authorization of $40 billion by December 31, 2016.

You can gain exposure to Microsoft by investing in the Technology Select Sector SPDR Fund (XLK) and the iShares Core S&P 500 ETF (IVV). Microsoft accounts for 8.67% and 1.86% of XLK and IVV, respectively.

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