Guru Spiros Segalas (Trades, Portfolio) more than doubled his stake in NVIDIA (NVDA) during the third quarter, adding an additional 2,843,573 shares of the company for $46.57 per share. The trade had a 0.63% impact on Segalas’ portfolio. He now owns 4,995,812 shares of the company. Since Segalas more than doubled his stake in NVIDIA, the company’s market price has gained an estimated 37%.
NVIDIA has a market cap of $34.25 billion, a price-earnings (P/E) ratio of 41.83, an enterprise value of $31.7 billion and a price-book (P/B) ratio of 7.69.
NVIDIA is an American technology company that was founded in 1993. It is based in Santa Clara, California. The company is a world-leading visual computing company. NVIDIA has a broad portfolio of products that offer AI supercomputers, virtual desktops and 3D rendering, as well as its shield, which offers its clients the opportunity to game and stream in 4k resolution. The shield box is powered by Android TV and is supported by over 60 apps, including Netflix, Hulu, VUDU, HBO and YouTube, among others. NVIDIA also offers the Shield Portable, which enables NVIDIA customers to download apps and play games remotely. NVIDIA is currently focusing on mega technology trends, including virtual reality, artificial intelligence and self-driving cars.
According to GuruFocus, NVIDIA has a financial strength rating of 7, with a cash to debt ratio of 3.40, an equity to asset ratio of 0.60 and an interest coverage ratio of 22.06. Its Altman Z-Score of 10.10 places it in the safe zone, meaning it is not in danger of filing for bankruptcy within the next two years. The company also has an 8 of 10 profitability and growth rating, with an operating margin of 19.47%, a net margin of 16.60%, a return on equity (ROE) of 20.72%, a return on assets (ROA) of 12.50% and a return on capital (ROC) (Joel Greenblatt (Trades, Portfolio)) of 168.55%.
On March 7, Meridian Funds (Trades, Portfolio) commented on NVIDIA.
"NVIDIA Corp. is the dominant provider of visual computing technologies used for PC based video games and is expanding into new markets in enterprise computing and automotive. We originally invested in the company after management significantly increased R&D spending in order to enter the mobile, automotive and enterprise markets. These investments depressed earnings, and investors were initially disappointed with failed product launches in cell phones and tablets. However, we view NVIDIA’s technology as highly differentiated, and feel that there are excellent opportunities outside of mobile devices. Stock performance this quarter was driven by another solid earnings report, supported by continued growth in the traditional PC gaming industry and sales of chips for automotive infotainment systems. Based on the market opportunities in auto and enterprise computing, we continue to hold shares."
It is likely that Spiros Segalas (Trades, Portfolio) more than doubled his stake in NVIDIA during the third quarter because NVIDIA is a world leader in visual computing, and it has continued to gain momentum with strong growth in multiple areas over the previous 12 months.
NVIDIA’S revenue has increased by 8.30%, its EBITDA increased by 30.60%, its Operating Income Growth by 44.40%, its EPS without NRI Growth by 61.10%, its free cash flow by 16.70% and the company’s book value has increased by 7.90% over the previous 12 months.
The company also has a differentiation advantage with its world class technology and broad portfolio of products. NVIDIA has vigilant leadership from its CEO and founder Jen-Hsun Huang.
Disclosure:Ă‚ Author does not own any shares of this company.
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