Is it time to trim your position in Microsoft? This analyst thinks so

Microsoft Corp (NASDAQ: MSFT) has had a fantastic run in the stock market this year. With about 40% gain year-to-date, the stock is now exchanging hands at a record high, leaving investors wondering if now would be the time to take profit?

Victoria Fernandez’ comments on CNBC’s “Closing Bell”

According to Crossmark’s Victoria Fernandez, trimming is a better option instead of removing Microsoft entirely from your portfolio. In her interview with CNBC’s “Closing Bell”, she said:

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“It makes sense to trim and put that money in cyclical or value stocks to balance out the portfolio. Taking a little bit off the table and keeping it in cash is another option, so you’d have some dry powder when there’s a pullback in the market.”

The “trimming” strategy, Fernandez added, applies across the board in mega-cap tech stocks. While Amazon has been a laggard in the past few weeks, Apple, Alphabet, and Facebook are on the same trajectory as Microsoft in trading near record levels.  

What did Crossmark pick after trimming MSFT?

The chief market strategist reiterated that Crossmark still likes big tech names but have trimmed positions to diversify the portfolio. New names that have been picked up include Target Corp after reporting market-beating results for the second quarter earlier this week, and Ford Motor.

Crossmark also bought Anthem shares as healthcare stocks are known to perform well in August, Fernandez added. The news comes on the same day when optionMONSTER co-founder Peter Najarian said Microsoft was more important to the market’s next move overall compared to Amazon.

Last month, Microsoft posted record results for fiscal 2021 with $165 billion in sales and over $60 billion in profit. Its financial results also blew past the Wall Street estimates for the fourth quarter. The $2.29 trillion company now has a price to earnings ratio of 37.79.