As reported by GuruFocus Real Time Picks yesterday, Carl Icahn cut his position in WebMD (WBMD) by nearly 20%. Despite his sell, Icahn still remains the largest guru shareholder of WebMD stock.
On Sept. 17 Icahn reduced his holdings in WebMD by 17.51% by selling a total of 1,173,092 shares of the company’s stock. He sold these shares at an average price of $31.23 per share, bringing in over $36.6 million as a result of this transaction.
Icahn’s sell of these shares represents his first transaction in the company since the first quarter of 2012. After this sell, Icahn holds on to 5,527,433 shares of WebMD stock, representing 10.97% of the company’s shares outstanding.
Icahn’s holding history as of the close of the second quarter:
WebMD is a provider of health information services, serving consumers, physicians, healthcare professionals, employers and health plans through their public and private online portals, mobile platforms and health-focused publications.
WebMD’s historical pricing:
The company recently announced a new version of its market-leading app for the iPhone. The app will include personalized and engaging multimedia lifestyle content. The company claims that “it is the latest milestone in WebMD’s commitment to create and deliver the most engaging health content based on the unique health needs and interests of each user.”
On Sept. 11, WebMD announced the preliminary results of its tender offer to purchase up to 5 million shares of its common stock at a price of $34.00 per share. Based on the preliminary count by American Stock Transfer & Trust Company, the depository for the tender offer, approximately 28.5 million shares of common stock were tendered and not withdrawn. Since the offer was oversubscribed, the number of shares that WebMD will purchase from each tendering shareholder will be pro-rated. Based upon the preliminary count, WebMD estimates that the pro-ration factor will be approximately 18%.
As of Sept. 10, the company had approximately 50.8 million shares of common stock outstanding, and after the transaction goes through, the company expects to have 45.8 million shares outstanding and $880 million in cash and cash equivalents.
WebMD’s historical revenue and net income:
It’s also interesting to note that alongside Icahn, chairman of the board of WebMD, Martin Wygod, also sold a significant 185,938 shares yesterday. The company had not seen much insider activity over the past year up until the middle of July when several insiders began selling shares.
As seen in the chart above, several insiders began selling shares of WebMD as the company’s price rebounded to hit and exceed its 52-week high.
The GuruFocus analysis on WebMD reports that the company’s price is at a one-year high, its P/E ratio is nearing a 10-year high and its P/S ratio is also close to a one-year high.
WebMD is held by three big gurus:
1. Carl Icahn: 5,527,433 shares, representing 10.97% of the company’s shares outstanding.
2. Steven Cohen: 2,597,194 shares, representing 5.15% of the company’s shares outstanding.
3. Jim Simons: 182,180 shares, representing 0.36% of the company’s shares outstanding.
WebMD has a market cap of $1.54 billion. Its shares are currently trading at around $30.48 with a P/E ratio of 713.30, a P/S ratio of 713.30 and a P/B ratio of 3.00.
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