Dollar Tree, VeriSign, and Other Recent Hedge Fund Buys

Sean Cullinan’s Point State Capital  had been selling shares of Verisign, Inc. (NASDAQ:VRSN) during the third quarter, but recently began buying the stock and owned 4.7 million shares as of its most recent filing. VeriSign dropped in price recently after the government decided that it would not allow the company to raise prices for its .com registries. This is likely to weaken the company’s growth rates, which had been strong, and we’re not sure how well the business will perform going forward. Analyst estimates have the stock priced at 17 times forward earnings estimates. Read our analysis of Verisign compared to its peers.

UTi Worldwide Inc. (NASDAQ:UTIW) has seen P2 Capital Partners close in on 10% ownership of the company’s stock, with Claus Moller’s fund reporting a position of 9.8 million shares in the $1.4 billion market cap supply chain management company. In its most recent quarter, UTi reported declines in revenue and earnings by over 10% compared to the same period in the previous year, and the stock’s trailing P/E multiple is 25. Analyst expectations are for a much better 2013- the forward P/E is only 15- but we would avoid it.

Silver Point Capital, a hedge fund managed by Edward Mule, reported owning 1.6 million shares of Nexstar Broadcasting Group, Inc. (NASDAQ:NXST), up from a bit under 500,000 shares at the beginning of October. Nexstar is a $300 million market cap broadcasting company whose TV networks reach close to 11 million viewers in the United States. The company reported high revenue growth in the third quarter compared to the same period in 2011. While earnings have been good on a trailing basis in terms of the stock’s current valuation, Wall Street analysts are skeptical of Nexstar’s future performance and the forward P/E multiple is 22.