A Hedge Fund Owns Almost 13% of LogMeIn

Page 1 of 2

Cadian Capital Management, a hedge fund managed by former Perry Capital technology portfolio manager Eric Bannasch, has reported a position of 3.1 million shares in LogMeIn Inc (NASDAQ:LOGM). LogMeIn is a remote access services and software company with a market capitalization of about $590 million (though over 270,000 shares are traded on average per day, and the current stock price is above $23, so there is plenty of dollar volume). Cadian’s holdings give it 12.6% of the outstanding shares of the company. The technology-oriented fund had not owned any shares of LogMeIn at the beginning of July 2012, and had reported owning 1.5 million shares at the end of September (check out more of Cadian’s stock picks).

LogMeIn’s revenue was down 12% in the third quarter of 2012 compared to the same period in 2011, about the same rate at which sales had declined in the first half of the year. However, the company has slashed its sales and marketing costs, to the effect that even with an increase in general and administrative expenses pretax income actually rose 14%. Again, this was about the same growth rate that LogMeIn Inc had experienced in the first six months of 2012 versus a year earlier.

However, even after these numbers have come in the stock looks quite expensive. The company earned 15 cents per share in the first nine months of 2012- and keep in mind this was after increasing its earnings, so the bottom line isn’t abnormally low- and as we’ve mentioned the stock currently trades above $23. Even optimistic sell-side projections for 201- analysts say that LogMeIn Inc will earn 81 cents per share this year- imply a current-year P/E multiple of 29. 20% of the outstanding shares are held short, showing that while Cadian is bullish a number of traders consider the stock overvalued. It’s possible that the valuation is being pushed up due to the potential of being acquired by a Microsoft Corporation (NASDAQ:MSFT) or an International Business Machines Corp. (NYSE:IBM), because the fundamentals don’t seem to support a price at these levels.

David Shaw

Even before the large increase in its holdings Cadian was the largest hedge fund holder of the stock at the end of the third quarter, according to our database of 13F filings. However, we did see two hedge funds managed by billionaires buying the stock during the quarter. At the end of September, David Shaw’s D.E. Shaw owned about 820,000 shares (find more stocks D.E. Shaw was buying) and Steve Cohen’s SAC Capital had 650,000 shares in its own portfolio (see Cohen’s favorite stocks).

What about other business software companies?

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!