Informatica Corporation (INFA): Will Elliott Management Push for Sale?

Analysts would seem to disagree however on the value of Informatica Corporation (NASDAQ:INFA). Credit Suisse has downgraded them from a price target of $52.00 a year ago, to $35.00 today. They suggest that Informatica faces several potential risks, including the release of open-source software that could cut into their subscription numbers, slowing growth, and less incentive for management to try and maximize shareholder value due to active insider selling. According to our insider sales tracker, Informatica had 148 insider sales during 2014, the majority of them by President and CEO Sohai Abbasi.

Likewise, Wedbush Securities initiated coverage of Informatica on Monday and only rated them a hold, with a $37.00 price target. Analysts at RBC Capital gave them a $38.00 price target on January 7, while Barclays raised their price target to $39.00 from $34.00. However even in the latter case, that was still well under the stock’s current price of over $42.00.

TheStreet was a little more positive in their assessment on January 15 however, upgrading their rating to “Buy”, and opining that strong income and revenue growth, coupled with zero debt and expected earnings per share that would be vastly improved next year, made for an intriguing stock.

Informatica Corporation (NASDAQ:INFA) was one of the popular stocks during the third quarter among the hedge funds we track at Insider Monkey, with 17 funds disclosing new positions, while another 17 raised their exposure (several of them by multiples of their previous amounts). On the other hand, just five funds trimmed their exposure to the stock, and not a single fund sold out its entire stake.

The funds that we track seem to had it right, as Informatica has gained over 33% since its 52-week low in late July. However that rise has also contributed to making it not quite as attractive a stock as it was then. However, since the stock is a more likely target for a sale now given Elliott’s involvement, there still might be opportunities to invest.

Other funds with positions in Informatica and their amounts as of September 30 include Matt Sirovich and Jeremy Mindich’s Scopia Capital with 6.01 million shares, Eric Bannasch’s Cadian Capital with 3.04 millions shares, and Douglas Dossey and Arthur Young’s Tensile Capital with 1.24 million shares.

Disclosure: None