Billionaire Steve Cohen’s SAC Reports 5.2% Stake in WebMD Health Corp. (WBMD)

Page 1 of 2

A 13G filed with the SEC has reported that billionaire Steve Cohen’s SAC Capital Advisors owns 2.6 million shares of WebMD Health Corp. (NASDAQ:WBMD), giving it 5.2% of the total shares outstanding of the $1.5 billion market cap health information website. We can see from our database of 13F filings (which we track as part of our research on investment strategies; we have found, for example, that the most popular small cap stocks among hedge funds outperform the S&P 500 by an average of 18 percentage points per year) that SAC had only about 90,000 shares of WebMD Health Corp. (NASDAQ:WBMD) in its portfolio at the end of March (see more stocks SAC owned).

WebMD Health Corp. (NASDAQ:WBMD)’s revenue grew by 5% in its last quarterly report compared to the first quarter of 2012, with the company attributing much of this growth to advertising revenue on its public portals. While costs were still high enough that the business experienced a net loss, this loss was much lower than it had been in the prior year period. In addition, WebMD generally considers its business to be seasonally weaker earlier in the year due to trends in advertising. The company recently raised its guidance for Q2 results and now expects to have earned 5 cents per share for the quarter rather than a small net loss; this would be the first profitable quarter for WebMD Health Corp. (NASDAQ:WBMD) in adjusted earnings terms for some time.

Steven CohenThe stock’s valuation, however, already assumes significant improvements in the business for the future. Current consensus is for 22 cents in earnings per share this year, which would mean an average of 10 cents of EPS for each of the next two quarters. Then WebMD Health Corp. (NASDAQ:WBMD) is expected to earn 36 cents per share for 2014, and even if the company hits its target that results in a very high forward earnings multiple. That seems like an aggressive market price for a business dependent on advertising revenue. Billionaire Carl Icahn has been another major investor in WebMD, with his group’s 13F reporting a position of 6.7 million shares (find Icahn’s favorite stocks).

It’s most relevant to compare WebMD Health Corp. (NASDAQ:WBMD) to other online sources of on-demand information. These would include Yelp Inc (NYSE:YELP), Angie’s List Inc (NASDAQ:ANGI), Bankrate Inc (NYSE:RATE), and Tripadvisor Inc (NASDAQ:TRIP). Yelp and Angie’s List are also unprofitable on a trailing basis, and similarly to WebMD while the sell-side is predicting that they will soon break into the black earning are still expected to be quite low in 2014 relative to their current valuations.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors 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 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!