| | 11-28-2012, 12:06 PM Thread Author #1
Fund giant Yacktman doubles stake in RIM [article]
Donald Yacktman, whose US$19 billion mutual-fund firm has outperformed peers by picking undervalued stocks, is leading a rush of investors betting Research In Motion Ltd. and its BlackBerry smartphone can recover.
Yacktman Asset Management bought 12.2 million RIM shares last quarter, doubling the firm’s stake to about US$252 million, according to data compiled by Bloomberg. Yacktman sees value in the BlackBerry’s 80 million users worldwide, its physical keyboard and the promise of a new operating system, even as the phone’s U.S. market share drops to less than 2% from 8.5% a year ago.
. “People do like to use the keyboard, and there is a big embedded base,” Yacktman said in a telephone interview from Austin, Texas. “This company could be worth a lot more.”
His increased investment may have made Yacktman US$30 million to US$54 million as of Tuesday’s close, given he bought the stock between the quarterly highs and lows of US$6.31 and US$8.29. Yacktman doesn’t disclose the exact day on which he buys or sells a stock. RIM has climbed 70% since Sept. 24, when the most recent rally began.
Yacktman relies more than peers on picking individual stocks rather than indexes, a strategy that helped his firm outperform other mutual funds in the longest economic slump since the Great Depression. The US$7.1 billion Yacktman Focused Fund has returned 12% over the past five years, putting it in the top 1% of comparable funds, data compiled by Bloomberg show.
Yacktman’s firm increased its RIM stake to 4.5% by the end of last quarter, making it the fifth-largest shareholder, according to data compiled by Bloomberg. Fairfax Financial Holdings Ltd., founded by RIM board member Prem Watsa, is the biggest investor. RIM co-founders Mike Lazaridis and Jim Balsillie are second and third, followed by Primecap Management Co.
RIM is counting on BB10 and pent-up demand from its installed base of 80 million subscribers worldwide to break a five-quarter streak of declining year-over-year revenue. Chief Executive Officer Thorsten Heins also expects a wave of upgrades from RIM’s government customers, he said in an interview in Washington this month.
Other investors have been raising their stakes in RIM. Renaissance Technologies Corp. bought 9.9 million shares last quarter, increasing its stake to 3.2%. Viking Global Investors LP bought 4.6 million shares, having previously held none. And Franklin Resources Inc. raised its stake by 3.9 million shares to 3.3%.
Some investors may be wagering that some or all of RIM will be acquired, providing a payday even if BB10 fails. RIM hired JPMorgan Chase & Co. and RBC Capital Markets in May to help explore its strategic options, though Heins said in September that its focus is on negotiating a software licensing deal or other partnership.
Jefferies & Co. and Canadian Imperial Bank of Commerce raised their ratings on RIM this month. Even short-selling investors, who had previously bet on RIM shares falling, have bought into the stock. Ironfire Capital LLC President Eric Jackson said he bought an undisclosed number of shares last week.
“Most are greatly underestimating how many loyal subscribers will upgrade to BB10 in calendar 2013,” Jackson said in Toronto on Nov. 22.
RIM gets big boost from fund giant Yacktman ahead of BlackBerry 10 | FP Tech Desk | Financial Post