Paul Singer (Trades, Portfolio), founder of New York hedge fund Elliott Management Corp, purchased a 2.45% stake in Interpublic Group Companies, according to GuruFocus Real Time Picks.
In total Singer purchased 10,367,502 shares of the company on July 14, when its price closed at $19.41 per share. The stock price then hit a 10-year high of $20.64 on July 29, before falling back to close at $19.71 on Friday. Overall Interpublic is up 24% for the past year.
Singer said in the activist 13D filing:
“The Reporting Persons purchased the securities of the Issuer reported herein based on their belief that such securities are undervalued and represent an attractive investment opportunity. The Reporting Persons seek to engage in a constructive dialogue with the Issuer’s Board of Directors regarding steps to maximize shareholder value.”
The shareholding includes 3,675 underlying stock options exercisable within 60 days of purchase.
Interpublic Group is a global marketing solutions provider that offers advertising, public relations and communications planning.
On July 18 the company reported a 28% year-over-year increase in earnings per share to $0.23, and a 5.4% increase in revenue to $1.85 billion. For the full year, the company plans to exceed its organic growth target of 3% to 4% and expand its operating margin to 10.3% of greater.
Interpublic ended the second quarter with cash of $901.4 million and total debt to $1.76 million.
The company repurchased 3 million shares at a cost of $52.4 million and an average price of $17.81 during the second quarter. This brings its total for the first half of 2014 to $5.6 million shares at an cost of $97.3 million total with an average price of $17.51 per share.
Over the past five years, the company has experienced per-share revenue growth rates of 8.9%, EBITDA of 13.9% and book value of 6.7% on average annually.
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