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Ahmet Okumus’ Latest Move In Lifelock Inc (LOCK) & Other New Picks

Ahmet OkumusOkumus Fund Management significantly increased its stake in Lifelock Inc (NYSE:LOCK), according to a Schedule 13G filing with the Securities and Exchange Commission. The fund now owns about 5.19 million shares, up from 316,900 shares that it held at the end of the fourth quarter. This stake has given Okumus ownership of 5.5% of Lifelock’s outstanding common stock.

Although Lifelock Inc (NYSE:LOCK)’s fourth quarter EPS of $0.28 beat estimates by $0.01 and and revenues of $129.68 million were also $1.08 million higher than estimated, the stock is down about 16% year to date, mainly due to weak guidance for the first quarter. The company expects a net loss per share to be between $0.06 and $0.07, as opposed to the consensus EPS of $0.05. Ken Griffin’s Citadel Investment Group held a significant stake in Lifelock Inc (NYSE:LOCK), amounting to 1.65 million shares valued at $30.48 million at the end of last year.

Ahmet Okumus - Okumus Capital

Ahmet Okumus has quite an underdog story as he gave all he could to fuel his passion for trading on U.S. stock exchanges, which he realized when he visited the Istanbul Stock Exchange at the age of 16. He moved to U.S in 1989 to attend college with strong intentions of carving his niche on the investment scene. He did just that by setting up his own shop in 1997. Just one example of his valuation prowess from early years  is the $15,000 that he invested in 1992, a stake that he got from his mother, and the investment ballooned to $6 million by early 2000. The value of the fund’s equity portfolio stood at $479.72 million by the end of 2014 with technology and finance sectors amassing 52% and 35% of the portfolio value respectively. Okumus initiated five new positions during the fourth quarter, the most prominent of which were Dover Corp (NYSE:DOV), Nuance Communications Inc. (NASDAQ:NUAN), and Jive Software Inc (NASDAQ:JIVE).

With respective market capitalizations of $1.34 billion and $380.9 million, both Lifelock and Jive Software are small cap companies. This category is of special interest to us, since through our research we have discovered that a strategy based on these small cap picks of hedge funds performs far better than the most popular companies among these investment firms, which are mostly large cap stocks. Our small cap strategy based on immitating most popular small-cap picks, which we have been sharing in our newsletters since 2012, beat the S&P 500 ETF (SPY) by a staggering 79.4 percentage points since August 2012 through March 2015 and returned 132% during that period.

Okumus purchased some 534,600 shares of Dover Corp (NYSE:DOV), valued at $38.12 million during the fourth quarter. The stake which formed 7.95% of the portfolio value was also the largest of Okumus’ new picks. Among over 700 hedge funds that we track, Jeffrey Gates’ Gates Capital Managemet and Ric Dillon’s Diamond Hill Capital held the highest stakes in the company amounting to 3.53 million shares and 3.07 million shares respectively.

Dover Corp (NYSE:DOV) is down by about 11% over the last 52 weeks. The manufacturer of innovative equipment, components, and specialty systems is undergoing a period of assimilating its latest acquisitions, including Accelerated Companies, for which Dover paid $430 million in October last year. Dover Corp (NYSE:DOV)’s fourth quarter financial results included Earnings per Share (EPS) of $1.01, which beat estimates by $0.07 and revenues of $1.97 billion that came in $70 million below forecasts.

Nuance Communications Inc. (NASDAQ:NUAN)‘s stake in Okumus’ portfolio stood at 1.83 million shares valued at $26.06 million at the end of the fourth quarter. The hedge fund interest in the company, among those that we track, decreased as 28 funds had an aggregate investment of $1.08 billion at the end of the fourth quarter versus 33 funds with $1.09 billion a quarter earlier. Renowned activist investor, Carl Ichan held 60.78 million shares valued at $867.40 million towards the end of 2014.

Nuance Communications Inc. (NASDAQ:NUAN)’s EPS of $0.25 for the first fiscal quarter was $0.03 ahead of estimates and revenues of $489 million also came in $2.13 million higher than anticipated. The stock is down nearly 15% over the last year.

Jive Software Inc (NASDAQ:JIVE), a company that provides a social business software platform, formed 2.08% of Okumus’ portfolio as 1.66 million shares valued at $9.99 million were added during the fourth quarter. Scott Fine and Peter Richard’s Empire Capital Management is also a significant stockholder of the company with 5.1 million shares valued at $30.75 million.

Jive Software Inc (NASDAQ:JIVE) is down by about 37.5% over the last year. Net loss per share of $0.07 for the fourth quarter beat estimates by $0.03 and revenues of $47.69 also came $0.53 million ahead of estimates.

Disclosure: none