WATER ISLAND CAPITAL LLC recently filed their 13F report for the second quarter of 2022, which ended on 2022-06-30.
The 13F report details which stocks were in a guru’s equity portfolio at the end of the quarter, though investors should note that these filings are limited in scope, containing only a snapshot of long positions in U.S.-listed stocks and American depository receipts as of the quarter’s end. They are not required to include international holdings, short positions or other types of investments. Still, even this limited filing can provide valuable information.
Water Island Capital LLC is an investment management firm based out of New York City, New York. The company was originally founded in 2000 as a “specialist in event-driven investing” and is headed by President and CEO John S. Orrico. Water Island Capital conducts its research internally and externally, allocating its assets in the public equity and fixed income markets on a global scale. The company invests most heavily in the information technology sector, which alone makes up a fifth of the firm’s total asset allocations, and also invests in the other, making up just under another fifth of its allocations, finance, industrials, consumer discretionary, and real estate sectors, among other sectors to a lesser degree, in order of decreasing allocation. Water Island Capital holds its allocations an average of only 0.71 quarters and, in the most recent quarter, had a turnover rate of approximately 128%, indicating a fast trading approach. Water Island Capital is owned by its employees and currently operates with 50 employees of which 19 are investment professionals. The company oversees over $2.6 billion in total assets under management spread across 7 total accounts, all of which are discretionary accounts. Both of Water Island Capital’s total number of accounts and total assets under management have been increasing in recent years with its total number of accounts growing from 1 back in 2010 to its current amount and its total assets under management growing significantly from under $200 million five years ago to well over 15 times that amount today. The company mainly caters to investment companies, which makes up almost the entirety of its client base, and also provides services to other pooled investment vehicles to a lesser degree. Water Island Capital is the advisory to The Arbitrage Funds and offers the Arbitrage Fund, Event Driven Fund, and Credit Opportunities fund in its lineup of mutual funds.
As of the latest 13F report, the guru’s equity portfolio contained 76 stocks valued at a total of $1.58Bil. The top holdings were Y(4.77%), CHNG(4.53%), and MNDT(4.42%).
According to GuruFocus data, these were WATER ISLAND CAPITAL LLC’s top five trades of the quarter.
Coherent Inc
WATER ISLAND CAPITAL LLC reduced their investment in NAS:COHR by 265,893 shares. The trade had a 3.75% impact on the equity portfolio. During the quarter, the stock traded for an average price of $268.07.
On 08/15/2022, Coherent Inc traded for a price of $266.22 per share and a market cap of $6.61Bil. The stock has returned 0.71% over the past year.
GuruFocus gives the company a financial strength rating of 7 out of 10 and a profitability rating of 8 out of 10.
In terms of valuation, Coherent Inc has a price-earnings ratio of 57.50, a price-book ratio of 7.06, a EV-to-Ebitda ratio of 27.64 and a price-sales ratio of 4.28.
The price-to-GF Value ratio is 1.56, earning the stock a GF Value rank of 1.
CDK Global Inc
The guru established a new position worth 1,022,477 shares in NAS:CDK, giving the stock a 3.55% weight in the equity portfolio. Shares traded for an average price of $53.97 during the quarter.
On 08/15/2022, CDK Global Inc traded for a price of $54.76 per share and a market cap of $6.39Bil. The stock has returned 13.05% over the past year.
GuruFocus gives the company a financial strength rating of 4 out of 10 and a profitability rating of 9 out of 10.
In terms of valuation, CDK Global Inc has a price-earnings ratio of 19.70, a price-book ratio of 11.10, a price-earnings-to-growth (PEG) ratio of 2.32, a EV-to-Ebitda ratio of 14.71 and a price-sales ratio of 2.82.
The price-to-GF Value ratio is 0.99, earning the stock a GF Value rank of 6.
Cerner Corp
The guru sold out of their 714,690-share investment in NAS:CERN. Previously, the stock had a 3.45% weight in the equity portfolio. Shares traded for an average price of $93.94 during the quarter.
On 08/15/2022, Cerner Corp traded for a price of $94.92 per share and a market cap of $27.92Bil. The stock has returned 20.58% over the past year.
GuruFocus gives the company a financial strength rating of 7 out of 10 and a profitability rating of 8 out of 10.
In terms of valuation, Cerner Corp has a price-earnings ratio of 43.38, a price-book ratio of 6.88, a price-earnings-to-growth (PEG) ratio of 2.65, a EV-to-Ebitda ratio of 17.47 and a price-sales ratio of 4.46.
The price-to-GF Value ratio is 1.16, earning the stock a GF Value rank of 3.
Houghton Mifflin Harcourt Co
The guru sold out of their 2,873,568-share investment in NAS:HMHC. Previously, the stock had a 3.11% weight in the equity portfolio. Shares traded for an average price of $21.02 during the quarter.
On 08/15/2022, Houghton Mifflin Harcourt Co traded for a price of $21.03 per share and a market cap of $2.69Bil. The stock has returned 193.31% over the past year.
GuruFocus gives the company a financial strength rating of 5 out of 10 and a profitability rating of 3 out of 10.
In terms of valuation, Houghton Mifflin Harcourt Co has a price-earnings ratio of 13.06, a price-book ratio of 8.13, a EV-to-Ebitda ratio of 10.68 and a price-sales ratio of 2.62.
The price-to-GF Value ratio is 4.85, earning the stock a GF Value rank of 1.
Anaplan Inc
The guru sold out of their 889,775-share investment in NYSE:PLAN. Previously, the stock had a 2.99% weight in the equity portfolio. Shares traded for an average price of $64.77 during the quarter.
On 08/15/2022, Anaplan Inc traded for a price of $63.73 per share and a market cap of $9.59Bil. The stock has returned 16.85% over the past year.
GuruFocus gives the company a financial strength rating of 6 out of 10 and a profitability rating of 3 out of 10.
In terms of valuation, Anaplan Inc has a price-book ratio of 38.93, a EV-to-Ebitda ratio of -51.13 and a price-sales ratio of 14.91.
The price-to-GF Value ratio is 0.82, earning the stock a GF Value rank of 9.
Please note, the numbers and facts quoted are as of the writing of this article and may not factor in the latest trading data or company announcements.
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