First Eagle Investment Ups Stake in Teradata Corp

Jul 09, 2015

First Eagle Investment (Trades, Portfolio) increased its stake in Teradata Corp (TDC, Financial) by more than 17% on June 30, according to data reported by GuruFocus Real Time Picks.

The fund purchased 2,290,232 shares for $37.00 per share, bringing to the total holding to 15,294,583 shares. The graph below First Eagle’s holding history.

Teradata provides analytic data platforms, marketing and analytic applications, and consulting services. The stock price declined 13% over the past year, closing at $35.41 on July 8. The current P/E ratio is 16.9 and the P/S ratio is 2.06.

The company’s business predictability is rated 4.5 out of 5 stars based on consistent growth. Indeed, over the past five years, revenue grew by 12.2%, and EBTIDA grew 13.4%. In 2014, EBITDA per share was $4.26, up from $4.08 the year before.

In Q1 2015, Teradata reported net income of $22 million, which was down from $59 million in the year-ago quarter. According to the earnings press release, the company lost $22 million due to stock-based compensation expenses and other special items. Teradata also expects that EPS for the full year will be toward the low end of the $1.97 - $2.17 guidance range.

Free cash flow has been improving steadily, increasing by about 10% over the past five years. In 2014, free cash flow was $551 million, up from $372 million the year before.

The DCF calculator estimates a fair value of $35.39, indicating Teradata is fairly valued at the current price.

Joel Greenblatt (Trades, Portfolio), Caxton Associates (Trades, Portfolio), and Robert Olstein (Trades, Portfolio) also added to their positions in Teradata during the first quarter.

Noted value investor Jean-Marie Eveillard is the former portfolio manager for the First Eagle Global Fund, which is now led by Matthew McLennan and Kimball Brooker Jr. Over the past 10 years, the fund had an annualized return of 9.2%, compared to 6.87% for the MSCI World Index.

View First Eagle Investment (Trades, Portfolio)s’ latest stock picks here. Not a Premium Member of GuruFocus? Try it free for 7 days.

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