Billionaire Ken Griffin Sets His TiVo Stake for 5.2%

Billionaire Steve Cohen’s SAC Capital Advisors had more than doubled the size of its position in TiVo during the third quarter of 2012, to a total of 5.6 million shares (find more stocks Cohen was buying and read our analysis of TiVo from when SAC filed its own 13G). Omega Advisors, managed by billionaire Leon Cooperman and his team, initiated a position of 2.4 million shares between July and September (see more stocks Cooperman liked).

TiVo’s peers include Netflix, Inc. (NASDAQ:NFLX) and Sony Corporation (NYSE:SNE). Sony is also struggling in terms of profitability; the stock is down 33% in the last year, it is unprofitable on a trailing basis, and sell-side analysts do not see it earnings very much in its next fiscal year either. While some of its valuation multiples look low, such as its EV/EBITDA of 3.7x, we would avoid it. Netflix has been one of the most dramatic market stories over the last couple of years, and is currently priced at $100 per share. 24% of the outstanding shares are held short, though billionaire Carl Icahn has disclosed a position. Netflix, too, is also struggling to stay in the black and analyst consensus is for very low earnings in 2013.

Sustainable profitability seems to be some time away for TiVo, though it is interesting to see Griffin and Citadel taking a position here. We’d note that they might be more focused on short-term swings from the outcome of lawsuits than on long-term fundamental value, so investors should make sure that their own thesis on TiVo fits into their own time horizon rather than simply follow Citadel. We don’t find the company’s current financial situation to be particularly attractive.

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