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Kyle Bass and Paul Singer Top Guru Buys of the Week

March 18, 2014 | About:
Monica Wolfe

Monica Wolfe

131 followers
The following information is a highlight of the real-time guru activity we saw this week. To view more information on these gurus, check out their guru portfolios. The “Real Time Picks” reports the stock purchases and sells that Gurus have made within the prior two weeks. If a Guru makes a purchase or sell of a company in which they own a greater-than 5% stake, SEC regulations require them to report their transaction within two days. This week we saw notable increases and buys in Real Time activity from Kyle Bass (Trades, Portfolio) and Paul Singer (Trades, Portfolio).

Kyle Bass (Trades, Portfolio)

Over the past week Kyle Bass (Trades, Portfolio) made a notable increase in to Nationstar Mortgage Holdings (NSM). The guru added a total of 3,673,972 shares of the company’s stock. He bought these shares at an average price of $31.27 per share, and since then the price per share has gone up about 5% to $32.80 per share.

Bass now holds on to 4,759,610 shares of Nationstar Mortgage holdings, representing 5.26% of the company’s shares outstanding.

Bass’s historical holding history as of the close of the fourth quarter 2013:

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Nationstar Mortgage provides residential mortgage loan services. It services residential mortgage loans throughout the United States. Nationstar is one of the largest servicers in the US, with a residential mortgage servicing portfolio of over $391 billion in unpaid principal balance as of Dec. 31, 2013.

Nationstar Mortgage’s historical revenue and net income:

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The company recently released its fourth quarter and full year financial results which highlighted:

- 2013 GAAP EPS of $2.40 on net income of $217 million.

- Ending servicing portfolio UPB of $391 billion.

- 2013 servicing portfolio growth of 88%.

- 2013 return on equity of 25%.

- Funded volume of $24 billion in 2013.

The company also recently announced that they had received a letter from Benjamin Lawsky, Superintendent of the New York Department of Financial Services, which inquires about Nationstar’s servicing portfolio growth and mortgage servicing practices in 2013. In response to the letter and requests for information, CEO Jay Bray said, “We intend to comply fully and transparently with Mr. Lawsky’s request as we do when working with the dozens of state and federal regulators who oversee our business and industry on a daily basis.”

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

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Nationstar Mortgage Holdings has a market cap of $3.01 billion. Its shares are currently trading at around $33.27 with a P/E ratio of 13.80, a P/S ratio of 1.70 and a P/B ratio of 3.00.

Paul Singer (Trades, Portfolio)

Over the past week Paul Singer (Trades, Portfolio) made fairly large moves in two of his holdings. The guru upped his stake in Juniper Networks (JNPR) while cutting his holdings in Riverbed Technology (RVBD).

On March 12, Singer increased his position in Juniper Networks 825.42% by purchasing 21,402,285 shares of the company’s stock. He bought these shares at an average price of $25.39 per share which has since then gone up approximately 1% to $25.62 per share.

Singer now holds on to 23,995,185 shares of the company’s stock, representing 4.73% of Juniper Networks’ shares outstanding.

Singer’s historical holding history:

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Juniper Networks designs, develops and sells innovative products and services that together provide its customers with high-performance network infrastructure built on simplicity, security, openness and scale. The company serves the high-performance networking requirements of global service providers, enterprises, and public sector organizations.

Juniper Network’s historical revenue and net income:

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The analysis on Juniper Networks reports that the company’s price is near a 2-year high and its Piotroski F-Score is at 9, indicating a very healthy situation. The GuruFocus analysis also notes that its gross and operating margins have been in a long term decline, with an average annual rate of decline being -1.6% and -9.6% respectively.

Juniper Networks has a market cap of $12.67 billion. Its shares are currently trading at around $25.28 with a P/E ratio of 29.50, a P/S ratio of 2.80 and a P/B ratio of 1.77. The company had an annual average earnings growth of 6.10% over the past five years.

Singer cut his holdings in Riverbed Technology on March 11, making a -35% reduction in his position. The guru sold a total of 5,150,756 shares at an average price of $20.06 per share, and since then the price per share has dropped a slight -1% to $19.89 per share.

Singer now holds on to a total of 9,565,690 shares of Riverbed Technology stock, representing 5.82% of the company’s stock.

Singer’s historical holding history:

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Riverbed develops innovative and comprehensive solutions to the fundamental problems of IT performance across wide area networks. Its products enable its customers improve the performance of their applications and access to their data over WANs, and provide global application performance, reporting and analytics.

Riverbed Technology’s historical revenue and earnings growth:

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The analysis on Riverbed reports that the company’s asset growth is significantly faster than its revenue growth, its price is close to a 1-year high and its P/S ratio is also at a 1-year high.

Riverbed Technology has a market cap of $3.16 billion. Its shares are currently trading at around $19.77 with a P/S ratio of 3.10 and a P/B ratio of 3.88. Riverbed had an annual average earnings growth of 42.60% over the past five years.

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