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Sector Watch: Gurus Glom Conglomerates
Posted by: Sally Jones (IP Logged)
Date: September 21, 2013 10:22PM
As a business type that combines diverse businesses, conglomerates have lost popularity over the last few decades as executives realized the importance of a singular focus and a simple value proposition in managing a company. The conglomerates sector currently has 13 companies out of 55 on a 52-week low. The low ratio is 0.24.
Here are two conglomerates, out of 13, that billionaire Gurus are buying.
Check out New Mountain Finance Corp.’s high yield and jumping revenue.
Industry Sector: Conglomerates
Highlight: New Mountain Finance Corp. (NMFC)
Down 6% over 12 months, New Mountain Finance Corp. has a market cap of $555.82 million, and trades with a P/E of 6.20.
The current share price is around $14.54, or 8.1% off the 52-week high of $15.83. The yield is 9.40%.
Incorporated in 2010, New Mountain Finance Corp. is a closed-end, non-diversified management investment company, technically a business development company under the Investment Company Act of 1940. The company generates income and capital appreciation through investments in debt securities at all levels of the capital structure. New Mountain Finance Corp. invests in the debt of companies that are considered high quality, defensive growth companies.
Originating assets of $150.3 million in the second quarter, New Mountain Finance Corporation reported investment income for the three months ended June 30, 2013 was approximately $34.9 million, up from $19.5 million in the same quarter a year ago. The company declared a dividend of $0.34 per share for the third quarter of 2013, according to a company press release.
Guru Action: As of June 30, 2013, Chuck Royce is the sole guru stakeholder and there is active insider trading with nine buys since May 2013.
Chuck Royce made a new buy in the second quarter of 2013, buying 2,700 shares at an average price of $14.79 per share, for a loss of 1.5%. His current holding of 2,700 shares is 0.01% of shares outstanding.
Track share pricing, revenue and net income:
Highlight: Hyde Park Acquisition (HPAC)
Up 1% over 12 months, Hyde Park Acquisition has a market cap of $104.7million, and trades with a P/B of 20.40.
The current share price is around $10.40, or 0.5% off the 52-week high of $10.45. The yield is 0.00%.
Hyde Park Acquisition is a blank check company, meaning it’s a developmental stage company. Laurence Levy is the founder and chairman of Hyde Park Holdings, a private investment firm specializing in leveraged buyouts, formed in1986. Hyde Park Holdings invests strategically in businesses that emphasize operational excellence with additional add-on acquisitions.
Guru Action: As of June 30, 2013, Louis Moore Bacon is the sole guru stakeholder and there is no insider trading to report. In the third quarter of 2012 Bacon made a new buy of 367,500 shares at an average price of $10.09 per share, gaining 3.1%. In the second quarter of 2013, he made a gain of 1.6% on the holding.
Track share pricing, revenue and net income:
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Guru Discussed: Chuck Royce: Current Portfolio, Stock Picks
Stocks Discussed: NMFC, HPAC,
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