Whitney Tilson, the founder and Managing Partner of T2 Partners LLC and the Tilson Mutual Funds, has continued his recent trend of adding shares of Iridium Communications Inc. (IRDM). A graduate of Harvard Business School, Tilson entered the investing world with "virtually no experience in the business" and describes himself as "self-taught." He read heavily from established investing names, especially Warren Buffet, and draws from multiple investment styles. At heart, he is a value investor who employs a fundamentalist approach. He does not limit himself to a particular market cap or value style, buying instead whenever he sees value, and he utilizes extensive research as opposed to relying purely on investment metrics. After adding more than 5 million shares of IRDM in June, he added another 5.47% of the company as reported by his latest 13D filings.
Iridium Communications Inc. (IRDM)
In the start of 2010, Tilson held just over 750,000 shares of Iridium Communications. When the stock price dipped from $8.70 to $7.50 by the end of the first quarter 2010, Tilson doubled his holdings of IRDM to a total of 1,571,703 shares. Prices then began to rise over the next two quarters, during which Tilson capitalized by selling off more than 600,000 shares for average prices of $8.70 in the second quarter and $9.64 in the third quarter. Since then, prices have dropped back down, and Tilson has again been steadily increasing his shares in the company. This past June, he increased his holdings by more than 400% at an average price of $8.42, ballooning his total stock to more than 6.5 million shares. According to his latest 13D filings, Tilson's hedge fund T2 disclosed a 9.58% stake in Iridium Communications, indicating that he added another 5.47% of IRDM for a total of 6,886,304 shares in the company.
In the June 13D filings, T2 stated that they believe Iridium shares are a very attractive investment and that they intend to discuss with management the company's capital structure. T2 also indicated that they intend to purchase up to 100% of outstanding shares of Iridium warrants (IRDMW) which are exercisable into shares of common stock. They believe IRDM to be heavily undervalued and will triple in value over the next three to five years despite short-term volatility. Additionally, they find IRDM's position as one of only two major companies in the global satellite communications industry appealing, and its wide moat should help it sustain its growth.
Iridium Communications Inc., formerly GHL Acquisition Corp., is a provider of mobile voice and data communications services via satellite offering 100% global coverage. Iridium offers voice and data communications services to the U.S. and foreign governments, businesses, non-governmental organizations, and consumers via its constellation of 66 in-orbit satellites, seven in-orbit spares and related ground infrastructure. Iridium's commercial end-user base includes the emergency services, maritime, government, utilities, oil and gas, mining, leisure, forestry, construction and transportation markets. Iridium's products and related applications are installed in unmanned aerial vehicles, helicopters, commercial aircrafts, marine vessels, and ground vehicles.
According to their latest quarterly reports, Iridium Communications had a net income of almost $8.3 million, reversing their $1.3 million loss of the same time last year. Total revenue increased by almost $10 million year-over-year to $91.3 million, and operational EBITDA also increased by $9.5 million to $43 million. Total billable subscribers grew 25% year-over-year driven by Iridium's machine-to-machine ("M2M") data customers and Iridium OpenPort technology. They ended the first quarter with a CCE balance of $103.9 million and gross debt of $183.4 million, resulting in a net debt of $79.5 million. It currently has a P/E ratio of 9.3 and a P/S ratio of 1.8.
On 5/10/2011, Iridium announced that it intended to offer an exchange of its outstanding $11.50 warrants for Iridium common stock, offering .22 shares for every one warrant tendered. Iridium CEO Matt Desch commented "This warrant exchange simplifies our capital structure and significantly reduces potential future dilution of our shareholders."
On 6/20/2011, Iridium announced it signed a contract with International Space Company Kosmotras as a supplemental provider of launch services for its next-generation satellite constellation, Iridium NEXT. Iridium NEXT is planned to replace iridium's current constellation of communication satellites, offering enhanced services and capabilities around the globe.
Other Recent Activity
Director Terry L. Jones sold 4,030,855 shares of Iridium Communications during the first quarter of 2011 at an average price of $8.15, reducing his holdings to at least 722,855 shares.
This is part of GuruFocus Real Time Picks report, which reports the stock trades of Gurus within the last few days. For more information, go to Real Time Picks.
Iridium Communications Inc. (IRDM)
In the start of 2010, Tilson held just over 750,000 shares of Iridium Communications. When the stock price dipped from $8.70 to $7.50 by the end of the first quarter 2010, Tilson doubled his holdings of IRDM to a total of 1,571,703 shares. Prices then began to rise over the next two quarters, during which Tilson capitalized by selling off more than 600,000 shares for average prices of $8.70 in the second quarter and $9.64 in the third quarter. Since then, prices have dropped back down, and Tilson has again been steadily increasing his shares in the company. This past June, he increased his holdings by more than 400% at an average price of $8.42, ballooning his total stock to more than 6.5 million shares. According to his latest 13D filings, Tilson's hedge fund T2 disclosed a 9.58% stake in Iridium Communications, indicating that he added another 5.47% of IRDM for a total of 6,886,304 shares in the company.
In the June 13D filings, T2 stated that they believe Iridium shares are a very attractive investment and that they intend to discuss with management the company's capital structure. T2 also indicated that they intend to purchase up to 100% of outstanding shares of Iridium warrants (IRDMW) which are exercisable into shares of common stock. They believe IRDM to be heavily undervalued and will triple in value over the next three to five years despite short-term volatility. Additionally, they find IRDM's position as one of only two major companies in the global satellite communications industry appealing, and its wide moat should help it sustain its growth.
Iridium Communications Inc., formerly GHL Acquisition Corp., is a provider of mobile voice and data communications services via satellite offering 100% global coverage. Iridium offers voice and data communications services to the U.S. and foreign governments, businesses, non-governmental organizations, and consumers via its constellation of 66 in-orbit satellites, seven in-orbit spares and related ground infrastructure. Iridium's commercial end-user base includes the emergency services, maritime, government, utilities, oil and gas, mining, leisure, forestry, construction and transportation markets. Iridium's products and related applications are installed in unmanned aerial vehicles, helicopters, commercial aircrafts, marine vessels, and ground vehicles.
According to their latest quarterly reports, Iridium Communications had a net income of almost $8.3 million, reversing their $1.3 million loss of the same time last year. Total revenue increased by almost $10 million year-over-year to $91.3 million, and operational EBITDA also increased by $9.5 million to $43 million. Total billable subscribers grew 25% year-over-year driven by Iridium's machine-to-machine ("M2M") data customers and Iridium OpenPort technology. They ended the first quarter with a CCE balance of $103.9 million and gross debt of $183.4 million, resulting in a net debt of $79.5 million. It currently has a P/E ratio of 9.3 and a P/S ratio of 1.8.
On 5/10/2011, Iridium announced that it intended to offer an exchange of its outstanding $11.50 warrants for Iridium common stock, offering .22 shares for every one warrant tendered. Iridium CEO Matt Desch commented "This warrant exchange simplifies our capital structure and significantly reduces potential future dilution of our shareholders."
On 6/20/2011, Iridium announced it signed a contract with International Space Company Kosmotras as a supplemental provider of launch services for its next-generation satellite constellation, Iridium NEXT. Iridium NEXT is planned to replace iridium's current constellation of communication satellites, offering enhanced services and capabilities around the globe.
Other Recent Activity
Director Terry L. Jones sold 4,030,855 shares of Iridium Communications during the first quarter of 2011 at an average price of $8.15, reducing his holdings to at least 722,855 shares.
This is part of GuruFocus Real Time Picks report, which reports the stock trades of Gurus within the last few days. For more information, go to Real Time Picks.
