Informatica’s Chief Marketing Officer Bought 4,000 Shares

Tiger Cub Philippe Laffont’s Coatue Management reported a position of almost 4 million shares in Informatica Corporation at the end of September (see more of Laffont’s stock picks). John Thaler’s JAT Capital Management and Christopher Lord’s Criterion Capital, two technology-biased hedge funds, each initiated a position in the company during the third quarter. Find more stocks that JAT Capital Management and Criterion Capital like.

We would consider International Business Machines Corp. (NYSE:IBM), Tibco Software Inc. (NASDAQ:TIBX), EMC Corporation (NYSE:EMC), and Oracle Corporation (NASDAQ:ORCL) to be among Informatica’s peers. These stocks generally trade at discounts to Informatica; when we look at trailing earnings multiples, for example, we see P/Es of 20 or lower except in the case of Tibco, which trades at 33 times trailing earnings. Of course, Tibco and Informatica have market capitalizations less than $5 billion, while the other three companies we’ve mentioned are worth 10 to 45 times that figure; this means that they have more room to grow, as well as that they have at least some potential to be acquired. Still, as we’ve mentioned it’s speculative to see Informatica as a growth company and we don’t like to invest in stocks based on the fact that it is possible someone might acquire the company. Forward earnings multiples for these four peers are all less than 20; IBM, EMC, and Oracle have forward P/Es in the 11-12 range and at that price they might be worth exploring. Oracle in particular did very well in its most recent fiscal quarter, with net income up 18% compared to the same period in the previous fiscal year.

We don’t think that Informatica is undervalued, and in particular it might be expensive compared to its larger peers even if it hits its earnings targets for the year. Its recent earnings beat left its net income down from a year ago, and at the very least that trend would have to reverse before we could begin to think about what earnings multiple would be appropriate for the company. We would avoid the stock.

Disclosure: I own no shares in any stocks mentioned in this article.

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.
Click here to Read Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 74 percentage points in 2.5 years. Our beta is only 1.2 (download a FREE newsletter and see the details inside)

Lists

Best Selling Magazines in the World

Shortest People in History

The Most Celebrated Holidays in the World

Most Expensive Handbag Brands in the World

Top Selling Comic Book Issues of this Century

The Most Powerful Women in Politics

Best Paid DJs

Most Rebellious Female Artists

Best Paid TV Actresses of 2014

Best Paid Actors of 2014

Most Expensive Horses in the World

Tallest People Ever

Most Encouraging Feminist Celebrities

Best Paid Supermodels of 2014

Top 10 Suburbs for Retirement in 2015

10 Wealthiest Cities in America

Top 10 TED Talks for Entrepreneurs

Best TED Talks on Education

25 Most Dangerous Places to Live in America

Top 10 Ski Resorts in the United States – 2014 List

Top 10 Most Remote Places in the World

Most Visited Museums in the United States

Wealthiest Photographers in the World

Most Famous Gay Athletes

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

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

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!