Steven Cohen (Trades, Portfolio) of Point72 Management increased his stake in SPX Corp (SPW, Financial) by more than 300% on June 1, according to data reported by GuruFocus Real Time Picks.
Cohen purchased 1,589,899 shares for $72.09 per share, boosting his stake in the company to a total of 2,075,499 shares. His holding history is depicted in the graph below.
SPX is a multi-industry manufacturer of processing systems, pumps, valves, filtration systems, etc. It operates in more than 35 countries and sells its products in more than 150 countries. The stock declined 35% over the past year, giving Cohen and other investors the opportunity to increase their stakes at a depressed price. The stock closed at $71.62 on July 2 and is currently undervalued when compared to the Peter Lynch earnings line.
For the first quarter ended March 28, SPX reported revenue had declined 12% to $950 million from the year-ago quarter, which included a 6% decline due to the strong dollar. SPX CEO Chris Kearney said in the company’s press release that low oil prices and on-going weakness in the power generation market may cause full year revenue to decline 6-10%.
Over the past five years, the company’s revenue grew by 4.1%, while EBITDA grew by 11.7%. Last year, SPX reported EBITDA per share of $17.97, a good improvement from $10.85 the year before. The current dividend yield is 2.09%, which is close to the five-year high, and the payout ratio is 73%.
Point72 is organized as a family office to manage Cohen’s assets as well as those of eligible employees. Cohen’s former hedge fund SAC Capital pled guilty to insider trading and was rebranded into Point72 in 2014.
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