Microsoft (MSFT) is due for a pop, while Meta Platforms (META) is due for a drop. That’s the conclusion of a new Morgan Stanley research report, which makes us feel really good about where we stand on both Club stocks. Each quarter, Morgan Stanley looks at under-owned stocks and over-owned stocks — basically which ones are overlooked and ready for a hot streak and which ones are crowded and ready to cool off. At the end of the third quarter, Microsoft became the most under-owned large-cap technology stock, according to analysts, dethroning fellow Club name Apple (AAPL). As if on cue, Microsoft closed at a new record high Monday, extending its year-to-date gains to nearly 58%. We’re bullish on Microsoft given its dominance in bringing artificial intelligence to its productivity products and its cloud. However, Morgan Stanley said Meta kept its most over-owned crown — and coincidently, its shares closed lower. Monday’s decline was our signal in a very overbought market to trim our position in the stock, which has soared more than 178% in 2023. The Club’s small Meta sale was about keeping the position under a 5% weighting in our portfolio and not reflective of any thesis change. Consistent with our trade we knocked Meta down to our wait-for-a-pull-back-to-buy 2 rating . Morgan Stanley’s under-owned and over-owned designations are based on the average weighting of the companies’ shares among the top 100 actively managed institutional portfolios compared to the S & P 500 weightings of their stocks. The analysts have found a “statistically significant relationship” between levels of active ownership relative to the market and future performance. MSFT YTD mountain Microsoft (MSFT) year-to-date performance Looking at the 15 tech names that Morgan Stanley covers, Microsoft’s active institutional portfolio weighting decreased by 33 basis points quarter-over-quarter — exiting the three months ended in September at 4.3%. Microsoft’s S & P 500 weighting declined by 29…
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