Noteworthy Institutional 5% Ownership Filings This Week In Healthcare And Tech

Includes: DVAX, GNTAQ, NUAN, S, T, VZ
by: GuruFundPicks

Many leading funds filed forms 13-D and 13-G (and form 4) with the SEC last week, on Monday through Wednesday, March 5th to March 7th, indicating that they had amended their ownership in U.S. traded public companies. The following are the most notable filings in the healthcare and tech sectors from that analysis (for more info on Forms 13-D and 13-G, and how to interpret that, please refer to the end of this article):

Sprint Nextel Corp. (NYSE:S): Sprint offers wireless and wireline communications products and services to individual consumers, businesses, government subscribers and resellers in the United States, Puerto Rico and the U.S. Virgin Islands. On Wednesday, Bank of New York Mellon Corp., with $239 billion in 13-F assets at the end of Q4, filed SEC Form SC 13G indicating that it held 148.3 million or 4.95% of outstanding shares, a decrease from the 152.7 million shares it held at the end of Q4. This drops them below the 5.0% beneficial ownership threshold. Other major institutional investors heavily invested in Sprint include Capital Research Global Investors (277 million shares), Dodge & Cox (226 million shares) and Franklin Resources (159 million shares).

Sprint shares are currently languishing near multi-year lows, after a disastrous 2011 in which shares were further cut by 55%, on top of crippling losses earlier in the decade in 2006-08 when shares lost 80% of their value. The company has been losing money, in contrast to peers AT & T Inc. (NYSE:T) and Verizon Communications (NYSE:VZ), both of which are profitable. It currently trades at 0.6 P/B and 0.22 PSR (price-to-sales ratio); in comparison, its peers in the diversified communications group, AT&T trades at 1.7 P/B and 1.4 PSR, and VZ trades at 3.1 P/B and 1.0 PSR.

Sprint has been in the news lately, as reports emerge that it is planning to end its $9 billion network-sharing agreement with 4G wholesale provider LightSquared that was signed last July. Under the agreement, Sprint would license some of its unused wireless frequencies to LightSquared, which the 4-G wholesaler will use to deploy its 4G network, and in return, Sprint would buy back some of the 4G services from LightSquared and offer it to Sprint customers. The agreement effectively bypassed Sprint's existing relationship with broadband wireless network services provider Clearwire Corp. (CLWR), whose shares plunged on the news last July. The ending of its relationship with LightSquared may be a positive for CLWR, and in turn for Sprint, that is a major holder of CLWR shares.

Dynavax Technologies (NASDAQ:DVAX): DVAX is a clinical-stage biotech company that is engaged in the discovery and development of novel products to prevent and treat infectious and inflammatory diseases. On Monday, hedge fund mogul Steven Cohen's SAC Capital Advisors, with 15.8 billion in 13-F assets at the time of its Q4 filing, filed SEC Form SC 13G indicating that it holds 7.86 million or 5.1% of outstanding shares, an increase from the 7.0 million shares it held at the end of Q4. SAC has been gradually accumulating a large position in DVAX, after initiating a new 3.0 million share position in Q3, and then added another 4.0 million shares in Q4.

DVAX is currently engaged in preparing to submit its first Biologics License Application (BLA) for the HEPLISAV Hepatitis B Vaccine to the FDA in the first quarter, followed soon by a submission of Marketing Authorization Application for European approval.

Genta Inc. (OTC:GNTA): Genta is a clinical-stage biotech company, engaged in the development of drugs for the treatment of cancer and related diseases. On Monday, healthcare-focused Sabby Management, headed by Hal Mintz, and with $44 million in 13-F assets at the end of the latest available Q3, filed SEC Form SC 13G indicating that it holds 386.7 million or 19.98% of outstanding shares, a new position for it, at least since the latest available Q3 filing.

Transcend Services Inc. (TRCR): TRCR provides medical transcription services in the U.S. to hospitals and multi-specialty clinics. On Tuesday, Royce & Associates, headed by mutual fund guru Charles Royce, and with $30.5 billion in 13-F assets at the end of Q4, filed SEC Form SC 13G/A indicating that it holds 1.09 million or 10.2% of outstanding shares, an increase from the 0.84 million shares that it held at the end of Q4. The trade should have been very profitable for Royce, given that just yesterday, TRCR announced that it signed a definitive agreement to be acquired by Nuance Communications (NASDAQ:NUAN), a developer of embedded speech and digital imaging software for customer service intensive industries, for $29.50 a share, at more than a 40% premium to its closing price of $20.97 the prior trading day.

General Discussion

Form 13-D is commonly referred to as "beneficial ownership report," and is required when a person or a group of persons acquires beneficial ownership of more than 5% of the voting class of a company's equity securities; form 13-G is the abbreviated version of the form that is allowed under certain circumstances.

The information in forms 13-D and 13-G is extremely timely as it is required to be filed within 10 days after the purchase, in contrast to 13-F quarterly filings by Institutions that are filed every three months. The information contained in 13-F filings, thereby, can as much as 18 weeks old by the time it is disseminated to the public. Furthermore, by virtue of their 5% ownership in public companies, the information contained in the 13-D and 13-G filings indicates only high confidence or high conviction moves by institutions and insiders, and hence can be interpreted to be of greater relevance to the investment community than the 13-F quarterly filings. Furthermore, 13-D and 13-G filings often are a precursor to hostile takeover, company breakups and other "change of control" events, and often they will include a letter to management explaining the reason for their taking a large stake in the company.

Credit: Fundamental data in this article were based on SEC filings, Zacks Investment Research, Thomson Reuters and The information and data is believed to be accurate, but no guarantees or representations are made.

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Disclosure: I am long CLWR.