We recently compiled a list of the Top 10 Stocks to Buy According to Lee Munder Capital Group. In this article, we are going to take a look at where Microsoft Corporation (NASDAQ:MSFT) stands against the other stocks.
Lee Munder Capital Group Investments, more commonly known as LMCG Investments, LLC, is an independent, employee-owned investment management company. Established in 2000 as Lee Munder Capital Group, it has 25 years of average investment experience and typically deals with alternative investments and wealth management. Specifically, the globally focused investment management firm provides a diverse array of investment strategies tailored to institutional investors, financial advisors, and private clients. The firm specializes in global equity, fixed income, and absolute return or relative value credit strategies. With a client-first approach, LMCG prioritizes aligning its interests with those of its investors, emphasizing transparency and long-term value creation. By leveraging its expertise and disciplined investment approach, the firm aims to deliver strong financial performance and best-in-class investment solutions. Founded and managed by Lee Munder himself, the firm has established a strong reputation in the financial industry.
As of March 2024, LMCG Investments manages discretionary assets totaling approximately $5.5 billion, serving 1,527 clients. The firm reported $1.63 billion in managed 13F securities for the fourth quarter of 2024, with its top 10 holdings making up over 28% of its portfolio. LMCG’s strategic investment approach and diversified portfolio reflect its commitment to delivering strong financial performance and value to its clients.
Munder also established Lee Munder Venture Partners LLC and founded Munder Capital Management. With extensive experience in investment management, Munder has held key positions, including Vice President at Loomis, Sayles & Co. LP. Currently, he serves as Chairman at IC Real Tech, an innovation-driven video technology company. Lee Munder holds an MBA from Wayne State University and an undergraduate degree from Ohio State University. Given this, we will take a look at top 10 stocks in Lee Munder’s portfolio.
Our Methodology
The stocks discussed below were picked from LMCG’s 13F filings for the fourth quarter of 2024. They have been compiled in the ascending order of the hedge fund’s stake in them as of December 31, 2024. To provide readers with a more holistic analysis of each stock, we have included the hedge fund sentiment regarding each company using data from over 900 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
Why are we interested in the stocks that hedge funds show interest in? The reason is simple: our research has shown that we can outperform the market by imitating the latest top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A development team working together to create the next version of Windows.
Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders as of Q3: 279
LMCG’s Equity Stake: $82.11 Million
Headquartered in Redmond, Washington, Microsoft Corporation (NASDAQ:MSFT) is a leading multinational technology conglomerate known for its contributions to personal computing, cloud services, artificial intelligence, and gaming. Founded in 1975 by Bill Gates and Paul Allen, Microsoft was officially incorporated on June 25, 1981. The company initially gained popularity with MS-DOS in the 1980s and later dominated the personal computing market with its Windows operating system. Microsoft went public in March of 1986, leading to significant financial success. Over the years, the company expanded beyond software into various industries, such as gaming with the launch of the Xbox console in 2001. It also strengthened its communication domain by acquiring Skype in 2011, a platform that revolutionized online voice and video calling.
In recent years, Microsoft Corporation (NASDAQ:MSFT) has heavily invested in artificial intelligence and cloud computing. In January of 2023, the company extended its partnership with OpenAI, reinforcing its leadership in AI-powered innovation. This was followed by the introduction of Microsoft 365 Copilot in March of 2023, integrating next-generation AI into its productivity suite. Soon after, Windows Copilot was launched on May 23, 2023, enhancing AI-driven user experiences. On September 21, 2023, Microsoft announced Microsoft Copilot as an everyday AI assistant, further embedding AI across its products. Continuing this trend, on October 1, 2024, the company introduced Copilot Labs and Copilot Vision, reinforcing its commitment to AI-driven advancements. These developments solidify Microsoft’s position at the forefront of technological innovation and artificial intelligence, ensuring its relevance in an evolving digital landscape.
Microsoft Corporation (NASDAQ:MSFT) was the largest holding in Lee Munder’s stock portfolio. LMCG owns over 194,808 shares of the company as of Q4 2024 worth over $82.11 million, which constitutes 5.03% of the hedge fund’s holding. Of the 900 hedge funds tracked by Insider Monkey, 279 funds had stakes in the company as of the third quarter of 2024, amounting to $91.01 billion.
For Q4 2024, Microsoft Corporation (NASDAQ:MSFT) announced a revenue of $69.63 billion with a year-over-year growth of 12%. Its operating income of $31.65 billion increased 17% as compared to the same quarter in 2023. Moreover, the company’s EPS for Q4 2024 was announced as $3.23, which was $0.11 more than the estimated EPS of $3.12.
Alger Spectra Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q4 2024 investor letter:
“Microsoft Corporation (NASDAQ:MSFT) is a beneficiary of corporate America’s transformative digitization. The company operates through three segments: Productivity and Business Processes (Office365, LinkedIn, and Dynamics), Intelligent Cloud (Server Products and Cloud Services, Azure, and Enterprise Services), and More Personal Computing (Windows, Devices, Gaming, and Search). During the quarter, Microsoft delivered better-than-expected fiscal first-quarter revenues, beating analyst estimates across all three segments. In the Intelligent Cloud business, Azure revenue grew 34% year[1]over-year, slightly above consensus, with AI Services contributing 12% to Azure’s growth, up from 11% in the previous quarter, as demand for AI continues to outpace capacity. However, shares declined after management signaled a potential deceleration in Azure growth for the next quarter and highlighted a negative earnings impact from OpenAI-related losses. Additionally, concerns over significantly increased AI-related capital expenditures (CapEx) raised questions about short-term profitability despite the long-term growth potential. While these near-term challenges led to shares detracting from performance for the quarter, we remain confident in Microsoft’s ability to maintain its leadership in AI.”
Overall MSFT ranks 1st on our list of Lee Munder Capital Group’s top stock picks. While we acknowledge the potential of MSFT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MSFT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
