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Whitney Tilson Keeps Up with Iridium

January 07, 2013 | About:
Recently, GuruFocus Real Time Picks reported that T2 Partners’ Whitney Tilson has increased his stake in Iridium Communications Inc. (IRDM) by 3.69 percent, a purchase of almost 20,000 shares.

Acquired in 2009, Tilson began his holding with 757,950 shares, bought at an average price of $8.73. After this latest transaction, Tilson holds a total of 540,759 shares, equivalent to 0.71 percent of Iridium’s outstanding shares. Last year, Tilson purchased shares throughout the year, except in the second quarter, when he shed 394,348 shares, about the time the stock’s average price slightly rose $1 or so.

Headquartered in Virginia, Iridium Communications is a mobile voice and data satellite communications network, which offers single subscriber devices that work worldwide.

Tilson feels that the stock is greatly undervalued, and likes the fact that Iridium is only one of two major players in the global satellite communications industry.

Due to its worldwide coverage, Iridium has captured the client base of the U.S. Marines, Air force, Army and other government defense entities.

In Tilson’s 2009 Iridium presentation, his firm highlighted that Iridium’s market share has grown rapidly, as well as its revenue, operational EBITDA and subscribers.

1357577157304.pngIRDM data by GuruFocus.com

On GuruFocus, Iridium showed a 24.56 percent market value decline in a five-year time frame. Its revenue growth, as well as its EBITDA growth trend lines both slope positively, according to 10-Year Financials.



In early December, Iridium announced it has completed its offer to exchange its remaining outstanding $7 warrants for Iridium common stock. The original offer enabled that Iridium would offer warrant holders one share of common stock for every six tendered.

As the offer expired at the end of November, results revealed 93.1 percent of the $7-warrants had been tendered.

For Iridium’s third quarter financial results, the company reported a 48 percent net income increase year over year, mainly driven from the life extension of the company’s current satellite constellation. In the report, its operational EBITDA sported a 6 percent growth, and its total revenue declined by 2 percent compared to 2011.

Besides Tilson, other Gurus who have holding of Iridium include Chuck Royce who owns 1.11 million shares, Jim Simons who owns 190,000 shares, Paul Tudor Jones who owns 129,800 shares and Richard Snow who owns 21,070 shares. SAC Capital’s Steven Cohen sold out of the stock in the third quarter of 2012. (Guru Trades: IRDM)

Iridium stock is up 0.15 percent at noon, trading at $6.87 per share. It has a P/E (ttm) of 9.2, a P/B of 0.67 and a P/S of 1.2.

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About the author:

Dianne Tordillo
Dianne Tordillo is staff writer for GuruFocus.com. She reports on a variety of financial news, primarily dealing with investor portfolios and stock trades. Her articles also highlight insider trades, as well as the many useful features of GuruFocus.

Visit Dianne Tordillo's Website


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