John Burbank (Trades, Portfolio) is the founder and CIO of Passport Capital. The firm was founded in 2000 with $800,000 in assets under management and has grown to approximately $4.4 billion as of 2015 under Burbank's investment guidance and leadership. Passport Capital currently owns 100 stocks with a total value of $5.96 billion.
In the first quarter of 2016, Burbank increased his stake in Hortonworks Inc. (HDP, Financial), adding 4,960,328 shares.
Hortonworks is a leading innovator at creating, distributing and supporting enterprise-ready open data platforms. Hortonworks' main competitors in the market include pure play Hadoop distribution vendors such as Cloudera and MapR Technologies, as well as enterprise software and infrastructure vendors that offer Hadoop distributions such as IBM (IBM, Financial), Oracle (ORCL, Financial) and Pivotal Software.
Hortonworks has a market cap of $601.82 million, an enterprise value of $507.53 million, a P/B ratio of 7.26 and a quick ratio of 1.23.
Hortonworks also has a few severe warning signs according to GuruFocus. The company’s Sloan ratio is showing poor quality of earnings. The short percentage of float is high at 27.44% of the float is shorted. The days sales outstanding is also building up, meaning that it's having difficulties receiving payments from customers.
There area few reasons why Burbank may have decided to add 4,960,328 shares of Hortonworks Inc.
- According to the company's website, data technology is growing at an exponential rate. Data technology and services market is growing at 6x the growth rate of the overall information technology market.
- Today 78% of companies are using open source software compared to 50% in 2011. This is expected to continue growing.
- In the future 20% of Americans will own smart refrigerators, smart thermostats, and smart watches, which will also benefit the company's business.
Hortonworks has a Financial Strength rating of 5/10 and a Profitability & Growth rating of 2/10 according to GuruFocus. One good sign that Hortonworks has is that it is not currently in any debt.
Hortonworks is an innovator working to create, distribute and support enterprise-ready open data platforms. The company's mission is to manage the world's data, which would be a remarkable feat if it can achieve its goal. I believe that Hortonworks is a high variance investment because it has a history of losses and it's in a competitive industry having to compete against IBM and Oracle.
Cheers to your investment success.
Disclaimer: Author does not own any stocks mentioned.
