Billionaire Ken Fisher Adds to Stake In Veeco Instruments

Page 1 of 2

Fisher Asset Management, managed by billionaire Ken Fisher, has reported that it owns 2.2 million shares of Veeco Instruments Inc. (NASDAQ:VECO), giving it ownership of 5.6% of the total shares outstanding. Veeco is a $1.3 billion market cap company which manufactures equipment that is then used by other technology companies to produce LEDs, solar products, and hard disk drives among others. This is an increase in Fisher’s position from the end of September, going by the fund’s 13F filing at that time.

We think that it’s particularly important to pay attention to what notable investors are doing in the small cap space (of course, blindly following these investors may not be a wise strategy). For example, we identified the most popular small cap stocks among hedge funds in our August newsletter and that portfolio went on to produce an excess return of 18 percentage points between September and January (read more about our hedge fund strategies).

Ken Fisher FISHER ASSET MANAGEMENTIn the third quarter of 2012, Veeco’s revenue fell by 53% compared to the same period in 2011. With margins shrinking as well, earnings decreased by over 60%. Recent bottom-line performance and the current market cap places the stock at 21 times trailing earnings, and Wall Street analysts expect continued decay in net income this year; as a result the current-year P/E is 28. That seems like a high valuation for a company which has been seeing sharp declines in business. Veeco Instruments Inc. is a very popular short, with 27% of the outstanding shares held short. This demonstrates a sizable bearish community, though it means that the stock is probably expensive to short. We would note that it does have a very large cash hoard- cash on the balance sheet came out to nearly $600 million, a large portion of its market cap- but even when we look at the company’s enterprise value and cash flow the valuation does not look particularly attractive at an EV/EBITDA multiple of 7.0x.

Chuck Royce’s Royce & Associates owned 3.7 million shares of Veeco Instruments Inc. at the end of the third quarter of 2012 (find Royce’s favorite stocks); that fund tends to concentrate on small-cap and mid-cap stocks. Joho Capital, which is managed by Tiger Cub Robert Karr, owned about 940,000 shares according to its own 13F filing (check out more stocks Joho owned). First Pacific Advisors, which is managed by Robert Rodriguez and Stephen Romick, cut their stake during the quarter but still owned about 710,000 shares at the end of September.

Are any of Veeco’s peers better value prospects?

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

The 10 Countries with the Highest Suicide Rates

The 10 Most Technologically Advanced Countries in the World

The 10 Safest Countries in the World to Live in Peace

The 10 Top Selling Smartphones in the World 2014

The 12 Biggest Shopping Centers in the World

The 10 Friendliest Countries in the World

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

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!