Why Is Billionaire Paul Singer Getting Deeper Into BMC Software, Inc. (BMC)?

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BMC trades with a $6 billion market cap, whereas potential acquirers are flush with cash–Microsoft with over $68 billion on hand, Oracle $33 billion, and IBM $11 billion. As far as potential BMC valuations go, in applying an 18 price to earnings multiple — mid-range of its 5-year P/E trading range — to the 2014 (ending March) EPS estimate of $3.87, and the upside in this back of the napkin valuation is upwards of 65%. In looking back the second quarter of 2012, billionaire Singer stated in his letter to BMC shareholders that there were multiple pathways for unlocking shareholder value, but these have yet be uncovered. I take solace in Singer’s recent purchase, but fear that without a buyout the performance will remain lackluster for the stock, at best, so buyer beware.

The article Why Is Billionaire Paul Singer Getting Deeper Into BMC? originally appeared on Fool.com and is written by Marshall Hargrave.

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