WebMD Health Corp. (WBMD): Shannon River Picks Up Passive Stake to 5.2%

Spencer M. Waxman‘s Shannon River Fund Management has picked up its passive stake in WebMD Health Corp. (NASDAQ:WBMD), as a new stake with the Securities and Exchange Commission showed. Shannon River disclosed ownership of around 1.96 million shares of the company, up from some 1.77 million shares the fund held at the end of June, according to its 13F filing. The new position amasses 5.2% of WebMD’s common stock.

WebMD Health Corp. (NASDAQ:WBMD)

Shannon River initiated a position in WebMD Health Corp. (NASDAQ:WBMD) during the last quarter of 2013, the initial stake containing some 1.28 million shares of the company. Following several increases, the company currently represents the most valuable long position in Shannon River’s equity portfolio. Mr. Waxman kept raising his exposure to the company during this year, even though the stock dropped by around 10% year-to-date. Shannon River bets heavily on the tech and media stocks, which historically have had a solid growth. Shannon river have had a compound annual return of approximately 19%.

Moreover, WebMD Health Corp. (NASDAQ:WBMD), which is a leading health information provider to consumers, has many investors among the funds that we track at Insider Monkey. However, many of them own bonds of the company rather than shares. For example, George Soros‘ Soros Fund Management holds around $109.5 million worth of the company’s bonds as of the end of June. Among the shareholders of the company, Kenneth Tropin‘s Graham Capital Management is the largest among the funds we track, holding 5.0 million shares as of the end of June, although the position represents around 0.15% of the equity portfolio. On the other hand, Josh Resnick‘s Jericho Capital Asset Management owns 2.49 million shares as of the end of the second quarter, the position in WebMD representing over 7% of the equity portfolio.

Shannon River increased its position in the company after WebMD Health Corp. (NASDAQ:WBMD) reaffirmed its financial guidance for the previous quarter of the year and the full 2014. The company earlier said that it expects its revenue for 2014 to amount between $570 million and $580 million, which would represent an increase between 11% and 13% on the year. The EBITDA is forecasted in the range of $152.5 million to $157.5 million, up by 24%-28% on the year. The net income is expected to amount to around $36.5 million to $40.5 million.

So far this year, Shannon River’s top holdings have not performed well, with posting either small gains or losses. IAC/InterActiveCorp (NASDAQ:IACI), the second-largest hoding, lost over 16% year-to-date and Activision Blizzard, Inc. (NASDAQ:ATVI), the third-largest, inched up by some 2.5%. Nevertheless, Mr. Waxman committed over 23% of his fund’s equity portfolio to a short position on SPDR S&P 500 ETF, a strategy adopted by many investors that expect the markets to go down and hedge their other equity holdings.

Disclosure: none