Whitney Tilson is the founder and managing partner of T2 Partners LLC and the Tilson Mutual Funds and also the co-founder, chairman and co-editor-in-chief of Value Investor Insight, an investment newsletter. Furthermore, he co-founded the Value Investing Congress, a biannual investment conference in New York City and Los Angeles, where he serves as vice president.
Tilson has written several books, such as "More Mortgage Meltdown: 6 Ways to Profit in These Bad Times" and "Poor Charlie's Almanack," and articles for Forbes, the Financial Times and other well-known newspapers. He has also appeared on TV shows several times, especially NBC, Bloomberg TV and Fox Business Network.
He has been granted an MBA with High Distinction from the Harvard Business School and before he started his professional career in 1999, he carried out several studies on the competitiveness of inner cities with Harvard Business School professor, Michael E. Porter.
His childhood in Tanzania and Nicaragua boosted his participation in a number of charities focused on education reform and Africa. He received different awards for his philanthropic works.
He has an outstanding background. Now let's look at his picks and see if they are as outstanding as his career.
Iridium: (IRDM, Financial) Iridum is a communications company that offers services across the world. A short time ago, the company became public and there is strong evidence that it is attractive to investors: The stock is cheap; the P/E ratio is 8; and it has a solid management.
Although IRDM is a top holding in his portfolio, Tilson has been reducing his position.
Xerox: (XRX, Financial) This famous company involved in the selling of photocopiers is in a downward trend. Nevertheless it is still attractive. Let's see why: stock price has dropped due to market correction. Now, it is more profitable for investors. Furthermore, its operating cash flow has reached $2 billion and capital expenditures are not high; they are nearly $500 million. Another issue worth considering is that management is paying out dividends to shareholders and they are yielding at 2.17%. Not bad at all. And there is even more. The company expects to repurchase 15% of its outstanding shares, and the services segment is expected to grow 6% year over year. This segment is providing most of the revenue.
Tilson continued adding to XRX position in the last quarter
Activision Blizzard:(ATVI, Financial) The online, computer, handheld, console and mobile games specialist has lately seen a drop in its stock, from 22.8x to 13.5x and is offering a dividend yield of 1.32%. The 2008 recession has seen its stock price fall 14.4%, although it was much better than its competitors. Despite the low EPS at $0.79, the following two years expect to see a rise by 17.7% and 15.1%, respectively. Despite the stock's high risk, the game industry is developing and market is loyal to the company with the console releases.
Tilson just barely sold the position in the last quarter.
Pep Boys (PBY, Financial) is afull-service and tire auto supermarket chain. It represents good value for investors because its gross service profit margin increased from 7% to 9.9% and its merchandise sales gross profit margin from 28.1% to 29.3%. Thanks to better cost controls, the company has been able to reduce SG&A costs from 25.2% to 22.5%. Furthermore, it has achieved a $39 million cash position and management is paying out up to $6 million in dividends. Least but not last, the PBY has real estate holdings, and management has envisioned investments for the future.
Tilson saw the stock cheap and added considerably to the position in the last quarter
What is curious is that in every case he focused on cheap stocks apart from other features that make these companies worth investing in.
Tilson has written several books, such as "More Mortgage Meltdown: 6 Ways to Profit in These Bad Times" and "Poor Charlie's Almanack," and articles for Forbes, the Financial Times and other well-known newspapers. He has also appeared on TV shows several times, especially NBC, Bloomberg TV and Fox Business Network.
He has been granted an MBA with High Distinction from the Harvard Business School and before he started his professional career in 1999, he carried out several studies on the competitiveness of inner cities with Harvard Business School professor, Michael E. Porter.
His childhood in Tanzania and Nicaragua boosted his participation in a number of charities focused on education reform and Africa. He received different awards for his philanthropic works.
He has an outstanding background. Now let's look at his picks and see if they are as outstanding as his career.
Iridium: (IRDM, Financial) Iridum is a communications company that offers services across the world. A short time ago, the company became public and there is strong evidence that it is attractive to investors: The stock is cheap; the P/E ratio is 8; and it has a solid management.
Although IRDM is a top holding in his portfolio, Tilson has been reducing his position.
Xerox: (XRX, Financial) This famous company involved in the selling of photocopiers is in a downward trend. Nevertheless it is still attractive. Let's see why: stock price has dropped due to market correction. Now, it is more profitable for investors. Furthermore, its operating cash flow has reached $2 billion and capital expenditures are not high; they are nearly $500 million. Another issue worth considering is that management is paying out dividends to shareholders and they are yielding at 2.17%. Not bad at all. And there is even more. The company expects to repurchase 15% of its outstanding shares, and the services segment is expected to grow 6% year over year. This segment is providing most of the revenue.
Tilson continued adding to XRX position in the last quarter
Activision Blizzard:(ATVI, Financial) The online, computer, handheld, console and mobile games specialist has lately seen a drop in its stock, from 22.8x to 13.5x and is offering a dividend yield of 1.32%. The 2008 recession has seen its stock price fall 14.4%, although it was much better than its competitors. Despite the low EPS at $0.79, the following two years expect to see a rise by 17.7% and 15.1%, respectively. Despite the stock's high risk, the game industry is developing and market is loyal to the company with the console releases.
Tilson just barely sold the position in the last quarter.
Pep Boys (PBY, Financial) is afull-service and tire auto supermarket chain. It represents good value for investors because its gross service profit margin increased from 7% to 9.9% and its merchandise sales gross profit margin from 28.1% to 29.3%. Thanks to better cost controls, the company has been able to reduce SG&A costs from 25.2% to 22.5%. Furthermore, it has achieved a $39 million cash position and management is paying out up to $6 million in dividends. Least but not last, the PBY has real estate holdings, and management has envisioned investments for the future.
Tilson saw the stock cheap and added considerably to the position in the last quarter
What is curious is that in every case he focused on cheap stocks apart from other features that make these companies worth investing in.
