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John Burbank Amps up Stake in Chinese Mobile App Company

Monica Wolfe

Monica Wolfe

133 followers
Guru John Burbank (Trades, Portfolio) of Passport Capital reported a rather sizeable increase in his portfolio earlier this week as reported by GuruFocus Real Time Picks. Burbank is the Chief Investment Officer and Managing Member of Passport Capital which he founded in 2000. Passport Capital managed approximately $3.9 billion in assets, as of June 30, 2014, and utilizes a combination of macroeconomic analysis, fundamental research and quantitative tools to pick its stocks.

Burbank made a massive increase to his holdings in the Chinese mobile application company Sungy Mobile (GOMO) on July 17. The guru upped his holdings 328.77% by purchasing 3,079,888 shares of the company’s stock. He bought these shares at around the daily average Sungy price of $10.50 per share, and since his buy the price per share has fallen slightly to $10.38 per share.

The guru now maintains over a 12% stake in the company made up of 4,016,688 shares of the company’s stock. Burbank is also the only guru with a position in Sungy Mobile as Steven Cohen (Trades, Portfolio) sold out of his position during the first quarter.

Burbank’s historical holding history:

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The guru bought into the company during the fourth quarter of 2013 and reduced his stake during the first quarter of 2014. Since his initial buy in the fourth quarter the stock price has dropped roughly -40%. Burbank’s buy also comes as the company recently announced a change to its Board of Directors. Dr. Feng Li has replaced Mr. Xiaosong Zhang in the Board as the chairman of the audit committee of the Board and as a member of the compensation committee and nominating and corporate governance committees as well.

Sungy Mobile is a China-based company provides mobile Internet pro ducts, applications and mobile platform development on a global level. Sungy owns three businesses: the global business GO series apps, and two domestic businesses called 3G Portal and 3G Book Market. Its ‘GO Series’ apps partner with companies like Google (GOOG), Baidu (BIDU) and Amazon (AMZN) and have over 210 million users in over 200 countries.

Sungy Mobile’s historical revenue and net income:

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The analysis on Sungy Mobile reports that the company holds no debt, its price is near a 1-year low and its P/S and P/B ratios are also trading at near historic lows.

The company’s most recent financials reported:

  • First quarter revenues up 63% year-over-year to RMB96.7 million
  • Adjusted EBIT up 61.9% to RMB21.3 million.
  • The company’s net income increased 23.7% year-over-year to RMB14.2 million
  • Accumulated number of users of GO series products increased 64.3% to 401 million, up from 244 million last year.
  • The number of paid downloads stayed the same at 0.5 million.
Sungy Mobile has a market cap of $353.4 million. Its shares are currently trading at around $10.62 with a P/E ratio of 59.30 and a P/S ratio of 3.40.

You can check out more information on Sungy Mobile here and more information of John Burbank’s portfolio and real time picks here.

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