On Aug. 18 Steven Cohen (Trades, Portfolio) of Point72 Asset Management bought 569,640 shares of Houlihan Lokey (HLI, Financial). The share buy in gives Point72 Asset Management a 5.4% stake in the company overall and a 0.1% position in Cohen’s portfolio with a value of $12.8 million.
Cohen’s Point72 Asset Management was previously known as SAC Capital Advisors and Cohen has a strong track record of delivering above average returns for investors. Point72 Asset Management currently manages approximately $14.68 billion in equity assets utilizing a long-short equity strategy approach.
Cohen’s investment in Houlihan Lokey makes it the 33rd financial sector holding in his portfolio. Cohen’s buy in of Houlihan Lokey follows the company’s initial public offering on Aug. 13. The firm’s initial public offering was priced at $21 a share and offered 10,500,000 Class A shares which receive one voting right per share.
Houlihan Lokey’s primary office is based in Los Angeles, Calif., and the investment bank has been in business since 1972. The firm primarily focuses on three main business segments which include Corporate Finance, Finance Restructuring and Financial Advisory Services. Within these three business segments, Corporate Finance provides merger and acquisition and capital markets advisory services. Financial Restructuring focuses on bankruptcy and insolvency proceedings. Last, its Financial Advisory Services business provides financial opinions and also includes valuation and financial consulting services. In recent years the firm has steadily grown its revenue, growing from $144.1 million in fiscal 2000 to $680.9 million in fiscal 2015. Net income has also grown from $15.6 million to $79.9 million over the same period. For the three months ended June 30, 2015, the firm had total revenue of $146.3 million, up 3.4% from the comparable quarter.
The firm primarily focuses on mid-cap investment advisory transactions which have a value below $1 billion. The firm has been highly successful in this market evidenced by its numerous accolades including its ranking as the leading M&A advisor for U.S. mid-cap transactions in each of the past nine years. The market for these transactions has been growing in recent quarters and Houlihan Lokey‘s strong capabilities in the area have continued to make it a market leader. Given the firm’s expertise it is expected to continue providing strong revenue growth in the investment banking market overall and the initial public offering for its stock is also likely to help it further increase its market share in the industry.
Steven Cohen (Trades, Portfolio)’s buy in of the stock provides further support for the company and its public offering. Since the offering on Aug. 13, the stock’s trading has been flat, opening at $22.75 on its first day of trading and closing at $22 on Aug. 20 for a total return of -1.79%.
