Point State Capital Buying Up Verisign (VRSN)

Page 1 of 2

Verisign, Inc. (NASDAQ:VRSN) saw Point State Capital increase its stake by over 150% per a 13G filing with the SEC last week. Point State now owns over 4.6 million shares, or about 3% of Verisign’s outstanding shares. This is a slight pivot from the third quarter when Point State sold off 33% of its Verisign shares. Sean Cullinan founded Point State in 2010 with six former Duquesne Capital portfolio managers, and focuses on a global macro strategy. Verisign is also one of billionaire Julian Robertson’s favorite picks (check out Julian Robertson’s new favorites).

TIGER MANAGEMENT

Verisign is also one of billionaire Stephen Mandel’s top picks, and was a new position for him in 3Q, good for around 2.8% of his 13F. Mandel is one of Julian Robertson’s “tiger cubs” that left Tiger Management in 1997 to found Lone Pine Capital.

Verisign had seen uncertainty in its shares over the past few months as the Department of Commerce contemplated the renewal of its contract to oversee .com registries. The DOC recently approved Verisign’s renewal, with a big caveat – the Internet service company cannot raise prices. This put the stock down over 10% during the last month and it now trades around $36 a share. Verisign will keep its current pricing of $7.85 per domain for the duration of its six-year contract, but without price hikes – four price increases by up to 7% – that its previous contract allowed.

The Internet company remains the leading provider of web registry services for .com and .net domains, with over 105 million .com domains and 5 million .net domains in its portfolio. Verisign is currently able to bring in $7.95 per year per domain name, allowing for solid reoccurring cash generation, and it expects revenues to be up by 10% in both 2012 and 2013. The company’s long-term growth rate following the contract renewal drops from a previous 20% CAGR to a revised 16%.

Verisign has no perfect competitors, but other key service-based tech companies include Yandex NV (NASDAQ:YNDX), Red Hat, Inc. (NYSE:RHT), Akamai Technologies, Inc. (NASDAQ:AKAM) and Equinix Inc (NASDAQ:EQIX). Yandex recently posted guidance that current FY revenues should be up 40% year over year. The Russian search company owns around 60% of its respective market, while trading above top peer Baidu at 30x earnings, compared to Baidu’s 20x multiple. Despite its high P/E, Yandex’s forward P/E comes in at 20x and its robust 30% expected EPS growth rate brings its PEG below 1.0.

Page 1 of 2
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 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

The 10 Most Peaceful Countries in the World

5 Big Reasons Communism Failed

The 15 Most Famous Carl Icahn Quotes

10 Scary Animals that are Actually Harmless

The 8 Most Famous Singer-Actors in Entertainment

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!