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Dan Loeb Reduces Largest Holding, Yahoo!
Posted by: Holly LaFon (IP Logged)
Date: February 4, 2013 04:59PM
Daniel Loeb reduced his position in largest holding Yahoo Inc. (YHOO) by 15.07% on Feb. 1, 2012, according to GuruFocus Real Time Picks. After the sale, he owns 62,000,000 shares. The founder of hedge fund Third Point LLC began building his 6.17% Yahoo stake in the third quarter of 2011 when the price averaged about $14 per share. Loeb chose to trim the position after a strong rally in the stock, implying he may believe its current three-year high share price is near its intrinsic value.
Yahoo shares began to move in October 2012, and have gained 21% in the last six months to date. On Monday, the price fell 2.13% to close at $19.34 a share, giving Loeb a substantial gain.
The first month of the new year was a positive start for Loeb, coming off an outperforming year. After returning 21.2% at his Offshore Fund versus 16% for the S&P 500 in 2012, he was up 4.8% in January.
Loeb has been actively involved in a turnaround prominent search engine since initiating his stake in the company, aiding in a CEO ouster, a CEO appointment and the sale of Yahoo’s Chinese interest.
Yahoo’s shares began to soar in October when the company announced its third quarter results. It had $1.089 billion in revenue excluding traffic acquisition costs, a 2% year-over-year increase, and $1.202 billion in GAAP revenue, a 1% decrease year over year.
GAAP net income jumped to $2.64 per diluted share, compared to $0.23 in the third quarter of 2011.
The company also finished the first stage of the sale of Alibaba, from which it received $7.6 billion in pre-tax proceeds. It plans to return $3.65 billion, or 85% of that to shareholders. The proceeds helped replenish Yahoo’s amount of cash to $9.4 billion, compared to $2.5 billion at year-end 2011.
In the third quarter, Yahoo repurchased 12 million shares for a total cost of $190 million.
The company has a P/E ratio of 5.8. Its P/B ratio of 1.46 is close to a one-year high, and its P/S ratio of 4.56 is close to a three-year high.
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Guru Discussed: Daniel Loeb: Current Portfolio, Stock Picks
Stocks Discussed: YHOO,
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