George Soros (Trades, Portfolio), chairman of Soros Fund Management LLC, has added a new stock to his portfolio: Polycom Inc. (PLCM, Financial). According to GuruFocus Real Time Picks, Soros acquired 9,400,078 shares, or 6.95% of the company on Jan. 24, 2014, when the stock price averaged $11.86 per share.
Polycom offers video collaboration software, enterprise-grade telephones and global collaboration services to the health care, entertainment, education, government, finance and manufacturing industries. Founded in 1990, Polycom operates in 31 countries.
Soros purchased his shares about a day after the company released better than expected fourth quarter results. Polycom announced revenue of $348 million, a decline from $353 million in fourth quarter 2012, and up from $336.5 million in third quarter 2013. It also had a net loss of $2.0 million, compared to net earnings of $1.9 million, and a net loss of $24.0 million in the same periods.
Stronger sequential results were driven by continued strength in its UC Personal Devices, which saw revenues increase 33% on a year-over-year basis, and gathering strength in its EMEA and Asia Pacific region businesses, which both delivered 11% sequential revenue improvement.
On the share repurchases front, Polycom bought back a total of 45 million of its shares in full-year 2013. In December, it announced an accelerated share repurchase program, wherein it pledged to buy an aggregate of $115 million in its common stock of about 8 million shares. The shares are slated to be purchased by June 30, 2014.
The accelerated plan comes as a completion of its previously existing $400 million return of capital program which, when complete, will have reduced the company’s share count by approximately 22%. This is in addition to another $102 million Polycom spent on repurchases earlier in 2013, before the $400 million program commenced.
Below is a graph of the company’s gradually declining shares outstanding:
The better than expected fourth quarter financial results gave an initial boost to the company’s shares, but as of Tuesday they have declined to a slightly lower price, trading around $11.62 a share, after gaining 19% in the past six months.
Polycom has $584 million in cash, as well as a P/B of 1.4 and P/S of 1.48.
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