John Griffin Acquires Stake in Mobileye

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Mar 31, 2015
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Mobileye (MBLY, Financial), a technology company that is based in the Netherlands with a research and development center in Jerusalem, is something of an enigma for investors.

Mobileye specializes in cutting-edge automotive technology. Its products are designed to help prevent auto collisions or lessen their severity when they can’t be avoided. The nature of the business means the products it chooses to promote tend to be big hits or big misses. Sometimes they pay off. Sometimes they don’t. The stock price fluctuates – it is up one quarter, down the next.

Founded in 1999, Mobileye’s first clients were automakers, whose products were initially offered as options on new cars. Mobileye’s products are now standard equipment on many new vehicles.

It’s no secret that there is a certain amount of risk in playing the stock market, but quarterly fluctuations like Mobileye's are riskier than many investors are willing to accept. In fact, at the end of the fourth quarter, three of the gurus we follow either reduced or sold out their stakes in Mobileye.

But one guru went the other way.

Reductions and divestiture – and an exception

In the fourth quarter, Ron Baron (Trades, Portfolio) sold more than 22% of a stake he first bought in the previous quarter for an average price of $46.85 per share, and PRIMECAP Management (Trades, Portfolio) kept nearly two-thirds of the stake it also acquired for $46.84 per share in the third quarter. Both sold for $46.92 per share.

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Leon Cooperman (Trades, Portfolio) sold the 50,000-share stake he bought in the third quarter. Cooperman paid an average price of $43.41 per share, and he also sold for an average price of $46.92.

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Guru John Griffin (Trades, Portfolio) was the exception. He bought a 25,000-share stake in Mobileye, paying an average price of $46.85 per share.

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Mobileye has a P/E of 0, a Price/Book of 22.1 and a Price/Sales of 31.4. GuruFocus rates its financial strength at 8/10.

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