Carl Icahn has been a busy man this week. Along with purchasing 4 million additional shares of Dell (DELL), the outspoken guru upped his position in Nuance Communications (NUAN) by over 50% as reported by GuruFocus Real Time Picks.
On Aug. 7, Icahn increased his position in Nuance Communications by 50.27%. The guru purchased a total of 17,041,121 shares at approximately $19.10 per share. The share price is trading at the same price today.
Icahn now owns 50,940,395 shares of Nuance Communications, representing approximately 16% of the company’s shares outstanding.
Icahn bought into the company in first quarter 2013 when he purchased 3.812 million shares. Since this buy, he’s seen a 9% decline in share prices. In April Icahn bought an additional 30 million shares, making him a 10% owner of the company, and since this buy the share prices have dropped approximately 18%.
Icahn’s holding history of Nuance as of the first quarter:
The recent increase by Icahn caused Nuance to hit its highest intraday price since May. Shyam Patil, an analyst at Wedbush Securities, theorizes that Icahn could be upping his stake in order to get the company to sell. Patil said earlier today in an interview, “This signals he’s here to stay. If the company were to put itself or certain assets up for sale, there would be a lot of interest.”
Potential suitors for a sale could include Microsoft, IBM or Oracle, but Patil said that Google or Apple could be interested in Nuance’s mobile technology.
Nuance Communications is a provider of voice and language solutions for businesses and consumers around the world. Its technologies, applications and services make the user experience easier and more compelling by transforming the way people interact with devices and systems.
Nuance’s historical price, revenue and net income:
The company’s third quarter results reported on Aug. 6 highlighted:
· GAAP revenue of $469.8 million, up 8.8% from last year.
· Non-GAAP revenue of $490.8 million, up 9.5% from second quarter 212.
· GAAP net loss of $35.0 million, or $0.11 per share, compared to a GAAP net income of $79.3 million, or $0.25 per share, in the third quarter 2012.
Nuance has a market cap of $6.18 billion. Its shares are currently trading at around $19.44 with a P/E ratio of 41.40, a P/S ratio of 3.40 and a P/B ratio of 2.20. The company had an annual average earnings growth of 23.1% over the past ten years.
GuruFocus rated Nuance the business predictability rank of 3.5-star.