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Sally Jones
Sally Jones
Articles (580) 

Icahn Increases Voice Recognition NUAN at 52-Week Low

May 01, 2013 | About:

The GuruFocus 52-week low screener reveals that Nuance Communications Inc. (NASDAQ:NUAN) is at a 52-week low of $18.94 (high was $25.89). According to the GuruFocus Value Screen for 52-week lows, NUAN is 26.8% off the high. But activist investor Guru Carl Icahn of Icahn Capital Management is putting his dough on this amazing voice recognition and imaging systems company that, in hindsight, has made television's old “The Jetsons” cartoon look like a kind of inspirational blueprint for today’s talking cars and interactive smart phones.

At last month’s launch of Nuance's mobile advertising “Voice Ads,” Guru Carl Icahn became the largest stakeholder with a new buy of around 29 million NUAN shares. As of March 20, 2013, the stock price range was $19.5 per share. According to GuruFocus Real Time Picks, Icahn increased his position again by 15.58% as of April 30, 2013, adding around 4.5 million shares in the price range of $23.30 per share, just as Nuance Communications reported a less than expected second quarter. The current NUAN share price is $19.04, with a change from average down 18%. The stock is down 23% over the past 12 months.

Nuance Communications Inc. (NASDAQ:NUAN) has a market cap of $7.32 billion. Its P/E is 33.2; the P/B is 2.1, and the P/S is 3.4626. The company’s 12-month revenue growth rate is 25.3%, annual rate per share.

High-Tech Product Development

A look at Nuance product development and design accomplishments shows that the company is tapping into every possible application for voice recognition and imaging systems in the healthcare sector with numerous hospitals, and in mobile and consumer applications with Apple, Asus, BlackBerry, DoCoMo, Ford, Fujitsu, GM, Honda, Kyocera, LG, Samsung and TPV. Nuance also serves enterprise customers like major banks as well as the U.S. Social Security Administration. The company’s more traditional segment is document imaging, working with companies such as IBM and Ricoh, among others.

Nuance Communications Financials

Yesterday Nuance Communications Inc. announced financial results for its second quarter fiscal 2013, ended March 31, 2013, reporting GAAP revenue of $451 million in the second quarter fiscal 2013, a 15.6% increase over GAAP revenue of $390.3 million in the second quarter of fiscal 2012. Nuance reported non-GAAP revenue of $484 million, which includes $33.0 million in revenue lost to accounting treatment in conjunction with acquisitions. Second quarter fiscal 2013 non-GAAP revenue grew 15.9% over non-GAAP revenue of $417.7 million in the second quarter of fiscal 2012.

In the second quarter of fiscal 2013, Nuance reported GAAP net loss of ($25.8) million, or ($0.08) per share, compared with GAAP net income of $0.9 million, or $0.00 per diluted share, in the second quarter of fiscal 2012. In the second quarter of fiscal 2013, Nuance reported non-GAAP net income of $110.4 million, or $0.34 per diluted share, compared to non-GAAP net income of $138.8 million, or $0.43 per diluted share, in the second quarter of fiscal 2012.

Nuance Chairman and CEO, Paul Ricci, commented, “We are disappointed with our results for the second quarter, which were driven by a combination of execution issues and external factors. We have taken immediate corrective actions to improve the performance of our business and revised our operating plan accordingly… Despite short-term setbacks, we continued to make advancements in the quarter, earning design wins and new bookings in new strategic product areas including our automotive business and Nina solutions for customer care.” Nuance’s Nina Web is a human-like virtual agent that can resolve customer requests in multiple languages, while conveying the brand essence of an enterprise.

Ricci also announced that Nuance had authorized a $500 million stock repurchase plan. Under the plan, Nuance intends to repurchase up to $500 million of its outstanding shares of common stock. He said, “Our share buyback program announced today underscores our confidence in the business and our focus on shareholder value as we expect growth to accelerate in fiscal 2014.”

Here’s a look at Nuance insider trading history:

The updated portfolio of Icahn Capital Management lists 15 stocks, with one new stock, NUAN, and a total value of $12.8 billion. The quarter-over-quarter turnover is 7%.

Here’s a summary of Carl Icahn’s top buys, top sells and top holdings.

GuruFocus "Real Time Picks" reports the stock purchases and sales that Gurus have made within the prior 2 weeks. The report time lag can be as short as 2 days after the date of the transaction. This feature is for Premium Members only. If you are not a Premium Member, we invite you for a 7-day Free Trial.

Check out the GuruFocus special feature 52-week low screener. This special feature helps you find the stocks hitting new lows but are still held by top investor Gurus and Insiders. If billionaire Gurus own these stocks and are still increasing their positions, it means that they believe the stocks are undervalued. Researching these stocks may help you find deep valued stocks.

About the author:

Sally Jones
Sally Jones writes about Real Time Picks. She says, "I truly enjoy watching the Gurus in realtime and telling their story."

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