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Steven Cohen Makes Two Real Time Buys in His Last Days as a Money Manager

January 07, 2014 | About:
Monica Wolfe

Monica Wolfe

131 followers

Guru and billionaire investor Steven Cohen (Trades, Portfolio)’s SAC Capital will no longer operate as a hedge fund this next year even though 2013 brought in some of the best returns ever for the fund.  After a tough year of accusations of insider trading for the fund, several important members of SAC Capital finally plead guilty to many of the charges last month. 

Steven Cohen (Trades, Portfolio) reported to his outside investors last Monday that the fund had mustered up a 20.10% gain this year, making it one of the hedge fund industry’s best returns to date.  Although this number is not final because it does not include the last two days of 2013, but even without the final two days these returns place SAC Capital among the hedge fund industry’s top performer’s of 2013.

Cohen is busy preparing to stop managing money for wealthy outside investors after his fund plead guilty to insider trading last month.  One of the conditions Cohen received as a punishment was that he was required to quit managing money for outside investors along with paying a $1.2 billion penalty. 

But at the close of the year Steven Cohen (Trades, Portfolio) added to two of his holdings according to the GuruFocus real time picks.

E-House China Holdings (EJ)

On Dec. 31, Steven Cohen (Trades, Portfolio) made a new buy into E-House China Holdings.  The guru had previously held the company up until the second quarter of 2011.  But in his newest buy the guru purchased 7,554,872 shares of the company’s stock.  He bought these shares at an average price of $14.21 per share, and since his buy the price per share is trading up 4% to $14.79 per share.

Cohen’s new holding in the company makes for 5.68% of the company’s shares outstanding. This buy also makes him the largest guru shareholder of the stock followed by Chuck Royce (Trades, Portfolio) and Jim Simons (Trades, Portfolio).

Steven Cohen (Trades, Portfolio)’s historical holding history of E-House China as of the third quarter:

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E-House China Holdings, through its subsidiaries, is engaged in providing real estate agency and brokerage services in the primary and secondary markets and real estate consulting and information services in China.

E-House China’s historical revenue and net income:

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The analysis on E-House China reports that the company shows strong financial strength and it holds no debt.  It also notes that the company’s revenue has slowed down over the past year, its dividend yield is close to a 5-year low and its price is nearing a 3-year high.

The company’s third quarter results highlighted:

  • Revenues increased 43% from last year to $195.7 million.
  • Revenues from real estate online services increased 85% from last year.
  • Revenues from primary real estate agency increased 10% to $61.4 million.
  • Non-GAAP income from operations was $36.9 million, up 79% from last year.
  • Non-GAAP net income was $27.6 million, or $0.20 per share, up from a net loss of $7.8 million, or $0.07 per share loss last year.

The Peter Lynch Chart suggests that the company is currently overvalued:

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E-House China has a market cap of $2 billion.  Its shares are currently trading at around $14.79 with a P/E ratio of 117.40, a P/S ratio of 3.00 and a P/B ratio of 2.40.  The company holds a dividend yield of 1.00%.

Crocs (CROX)

Steven Cohen (Trades, Portfolio) also notably upped his stake in the shoe company Crocs.  The guru increased his position 157.3% by purchasing 2,718,378 shares of the company’s stock.  He bought these shares at an average price of $16.14 per share, and since then the price is down slightly to $16.10 per share.

Cohen’s most recent buy gives him control of 4.85% of the company’s shares outstanding. Here’s a look at Steven Cohen (Trades, Portfolio)’s holding history of Crocs as of the third quarter:

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Cohen’s most recent buy makes him the second largest guru shareholder following Chuck Royce (Trades, Portfolio) and preceding Mariko Gordon (Trades, Portfolio).

Crocs is a designer, manufacturer, distributor, worldwide marketer and brand manager of footwear for men, women, and children.  It strives to be the global leader in molded footwear design and development.

Crocs’ historical revenue and net income:

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The analysis on Crocs reports that the company is currently showing strong financial strength, its revenue has slowed down over the past year and that its dividend yield is near a 5-year low.  It also notes that the company’s share price is sitting close to its 3-year high. 

The company had a big day on Dec. 29 when they announced a financial partnership with Blackstone, they expanded their share repurchase plan and announced their CEOs retirement.  Blackstone agreed to purchase $200 million of convertible preferred stock in order to help the company.  The company’s share repurchase authorization was increased to $350 million.  The company’s CEO John McCarvel announced that he would be retiring at or around April 2014.  Lastly, in this press release the company also reaffirmed the low end of its prior fourth quarter guidance and announced that they expect a revenue of approximately $220 million and a loss of $0.23 per diluted share.

You can read more about this on the Crocs’ press release here.

The Peter Lynch Chart suggests that the company is currently overvalued:

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Crocs has a market cap of $1.41 billion.  Its shares are currently trading at around $15.97 with a P/E ratio of 19.00, a P/S ratio of 1.20 and a P/B ratio of 2.00.

You can find out more about Steven Cohen’s real time investments here.

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