Guru Jeff Ubben (Trades, Portfolio) purchased a 541,115-share stake in Alliance Data Systems Corp. (ADS, Financial) in the first quarter.
Alliance Data Systems has a market cap of $12.42 billion, a P/E ratio of 24.28, an enterprise value of $23.29 billion and a P/B ratio of 7.13.
Alliance Data Systems is a provider of data-driven and transaction-based marketing and customer loyalty solutions. It offers a portfolio of integrated outsourced marketing solutions including customer loyalty programs, database marketing services, analytics and creative services, direct marketing services and private label and co-brand retail credit card programs. Alliance Data is the engine behind loyalty and marketing campaigns for more than 1,000 consumer-facing companies worldwide across all industries: retail, travel, pharmaceutical, financial services, auto and more.
It is possible that Alliance Data Systems' financial results over the previous 10 years had an impact on Ubben's decision to invest in the company.
Alliance Data Systems has significantly improved revenue growth (17.80%), EBITDA (20.60%), operating income (12.50%), EPS without NRI growth (19.20%), free cash flow growth (32.40%) and book value growth (9.30%) over the previous decade. The company is also trading far below its intrinsic value. According to GuruFocus, Alliance Data System's intrinsic value is $728.67 which gives Ubben a 71.12% margin of safety on his investment.
Alliance Data Systems is also traded in Germany.
Ubben is well educated with a significant amount of investment experience. He is a Duke University graduate who went on to receive his M.B.A from the Kellogg School of Management at Northwestern University. Upon graduation Ubben managed the Fidelity Value Fund at Fidelity Investments and also served as the managing partner of Blum Capital before co-founding ValueAct Capital in 2000.
Since 2000, Ubben has been managing ValueAct Capital, an investment firm that focuses on purchasing businesses with strategic value that have good management and good value proposition that can generate cash in good times and bad times.
Below is a Peter Lynch Chart for Alliance Data Systems.
Another noteworthy sign for Alliance Data Systems is that gurus such as Steven Cohen (Trades, Portfolio), Jim Simons (Trades, Portfolio), Ronald Muhlenkamp (Trades, Portfolio), Ray Dalio (Trades, Portfolio), Louis Moore Bacon (Trades, Portfolio), Arnold Van Den Berg (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio) have been active buying or adding to their stakes in the company.
Cheers to your investment success.
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