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Two Gurus Reduce Two Challenged Companies

October 11, 2013 | About:
Sally Jones

Sally Jones

49 followers
Both CSP Inc. (CPSI) and ITT Educational Services Inc. (ESI) have struggled in the last year. Their revenues are way down as of the second quarter, year over year. Richard Blum’s Blum Capital Partners LP continues to trim sinking education companies where the company is 10% owner, and John Rogers of Ariel Capital Management cuts a long-held defense company that delivered high gains over five years.

Here are company updates and reviews of the billionaires' trades:

Guru: John Rogers, Ariel Capital Management

CSP Inc. (CSPI): Reduced

Impacts Portfolio: -0.02%

Up 48% over 12 months, CSP Inc.has a market cap of $24.5 million but its enterprise value is $4.18 million. Shares were traded with a P/E ratio of 4.60 and a P/B of 1.10. The dividend yield is 2.80%.

Incorporated in 1968, CSP Inc. and its subsidiaries develop and market IT integration solutions and high-performance cluster computer systems. The company operates in two segments, systems, and service and system integration, serving the diverse requirements of industrial, commercial, and defense customers worldwide.

CSP Inc. reported financial results for the third quarter of fiscal 2013, ending June 30, 2013, with a net loss of $478,000, down from $774,000 in the same quarter of fiscal 2012. The company reported $0.14 earnings per diluted share, down from $0.22, in the same quarter a year ago. CSP’s net income for the first nine months of fiscal 2013 was reported as $377,000, a significant drop from net income of $1.7 million in the first nine months of fiscal 2012. The company reported revenue of $65.7 million for the first nine months of fiscal 2013, representing a 5% increase year over year. For the quarter, revenue of $19 million reflects a 15% drop year over year.

Guru Action: As of July 31, 2013, John Rogers reduced his position by 47.64%, selling shares in the average price range of $8.73. The current share price of $6.99 is down 20% change from average.

The five-year trading history of Guru Rogers shows double-digit and triple-digit gains in every quarter except for the second quarter of 2013, when he had a loss of 5.7%, selling 9,331 shares at an average price of $7.39 per share.

He has averaged a gain of 51% on 382,567 shares bought at an average price of $4.63 per share. Selling, he has also gained 10% on 13,331 shares sold at an average price of $6.32 per share.

Check out the other gurus holding CSPI. There are no recent insider trades.

Track historical pricing, revenue and net income since 1990:

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Guru: Richard Blum

ITT Educational Services Inc. (ESI): Reduced

Impacts Portfolio: -0.01%

Up 2% over 12 months, ITT Educational Services Inc. has a market cap of $723.7 million; its shares were traded at around $31.11 with a P/E ratio of 8.70 and a P/B of 3.90.

ITT Educational Services Inc. was incorporated in 1946. The company is a provider of postsecondary degree programs in the United States. It offers diploma, associate, bachelor and master degree programs. With over 140 ITT Technical Institutes in 38 states, ITT Technical Institutes are a private college system focused on technology-oriented programs of study. The ITT Technical Institutes have been actively involved in the higher education community in the United States since 1969. ITT Technical Institutes features seven schools of study, including the School of Information Technology, the School of Drafting and Design, the School of Electronics Technology, the School of Business, the School of Criminal Justice, the School of Health Sciences and the Breckinridge School of Nursing.

The company reported second quarter 2013 financial results with revenue of $259.9 million down from $329.8 million in the same quarter of 2012. Its operating income has decreased by 54.5% year over year. Net income for the quarter was reported at $20.9 million, compared to $46 million in the second quarter of 2012. Earnings per diluted share for the quarter are $0.89, down from $1.96 year over year. ITT Educational Services Inc. reported that while new student enrollment is up 7.5% over the same quarter a year ago, total enrollment is down by 11.7%. The company had 58,617 students enrolled as of June 30, 2013.

Guru Action: As of Oct. 10, 2013, Richard Blum reduced his position by 0.05%, selling shares in the average price range of $30.05. The current share price is $30.37, with a change from average up 1%. This is Blum’s fourth reduction since September 2013.

Blum’s five-year trading history shows 13 quarters of double-digit losses, starting back in the fourth quarter of 2008. This holding started to gain for Blum in the fourth quarter of 2012, when he gained 44% buying 579,120 shares at an average price of $21.61 per share. He also gain 103.9% in the following quarter and gained 51.2% in the second quarter of 2013. But overall, Blum has averaged a loss of 63% on 872,099 shares bought at an average price of $83.92 per share. Selling, he has shown a loss of 28% on 1,100,974 shares sold at an average price of $43.32 per share.

Check out the other gurus holding ESI and very active insider selling.

Track historical pricing, revenue and net income:

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About the author:

Sally Jones
Sally Jones writes about Real Time Picks. She says, "I truly enjoy watching the Gurus in realtime and telling their story."

Rating: 3.0/5 (3 votes)

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