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
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

10 Best States To Practice Medicine

The 10 Best States to Have a Business

The 12 Most Expensive Apple (AAPL) Apps in the Market

The 10 Richest Billionaires in the World

10 Biggest Kickstarter Failures

The 10 Best Places to Work At

The Top 10 of Google Inc (GOOGL)’s Most Expensive Acquisitions

13 Best Cities to Visit in South America

10 Most Expensive Works of Art of All Time

The 10 Richest Banks in the World

The 10 Best-Paying Jobs in America (2014)

7 Most Expensive Foods in the World

The World’s Top 10 Earning Authors

Five Wicked and Very Expensive Items (and Other “Stuff”) Sold on eBay

10 Biggest Celebrity Bankruptcies

The Top 10 Highest Paid CEOs in 2014

The 10 Most Expensive Real Estate Cities in America

10 Most Expensive States To Live In America

The 10 Best Airlines in the World

The 10 Best-Selling Cars in 2014

The 10 Best Industries to Invest In

The 10 Most Expensive States to Own a Car In

Top 10 Business Schools in US: 2014 Rankings

Top 20 Female Billionaires in 2014

6 Movies That You Should Watch to Better Understand The Cold War

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top 6 Tax Scams and How to Protect Yourself

Top Businesses to Invest In

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!