Many leading funds, including Wellington, Janus, BlackRock and T Rowe Price, filed forms 13-D and 13-G with the SEC over the last month, indicating that they had amended their ownership in U.S. exchange traded tech sector companies. The following summarizes four noteworthy buys and two noteworthy sells in the tech sector over the past month. Also, for more info on Forms 13-D and 13-G, and how to interpret them, please refer to our instablog discussion on institutional trades:
Zynga Inc (ZNGA): ZNGA develops, markets and operates online social games, making them available worldwide on various platforms, including Facebook , MySpace and Yahoo (YHOO), as well as the iPad, iPhone and Android devices. Last Tuesday, Denver, CO-based mutual fund powerhouse Janus Capital Management, with over $96 billion in 13-F assets, filed SEC Form SC 13G indicating that it holds 23.66 million shares, an increase from the 12.51 million shares it reported holding at the end of Q1. Also, on last Tuesday, mega fund T Rowe Price Associates, with $520 billion in assets under management filed SEC Form SC 13G/A indicating that it holds 12.02 million shares, a decrease from the 12.24 million shares it reported holding at the end of Q1.
In its latest Q1 (March), ZNGA beat analyst revenue and earnings estimates (6c v/s 5c), and guided FY 2012 EPS in-line. Its shares, already weak prior to the report, have dropped even more steeply following the report, mostly in tandem with the decline in FB shares, as it derives most of its revenue from FB. At its current sub-$5 price, ZNGA shares look particularly attractive, trading now at 13-14 forward P/E and 2.0 P/B, while earnings are projected to double from 18c in 2011 to 36c in 2013.
With shares trading at near all-time lows, a cadre of brokers have come out in support of the stock recently, with the most notable being Morgan Stanley, JP Morgan, Robert W. Baird, Stifel Nicolaus, Piper Jaffray, and Lazard, among others. Overall, Wall Street analysts are also bullish on the stock, with a mean price target of almost $12, more than twice current prices in the sub-$5 range.
In addition to ZNGA, institutions also indicated via their 13D/G filings over the last month that they increased their ownership in the following tech sector companies:
- Micron Technology (MU), a leading manufacturer of semiconductor memory solution, including DRAM, NAND and NOR flash memory, phase change memory, and image sensors, in which Bermuda-based value-focused mutual fund manager Orbis Investment Management filed SEC Form SC 13G indicating that it holds 101.30 million or 10.2% of outstanding shares, an increase from the 68.38 million shares it reported holding at the end of Q1.
- Ciena Corp. (CIEN), that is a designer of Ethernet transport and switching systems used in network infrastructure by telecom and cable service providers, in which mega fund Wellington Management, one of the largest private independent investment management companies in the world, with $634 billion in assets under management, filed SEC Form SC 13G indicating that it holds 10.01 million or 10.1% of outstanding shares, an increase from the 4.02 million shares it reported holding at the end of Q1.
- Cypress Semiconductor Corp. (CY), a designer, developer, manufacturer and marketer of mixed-signal and programmable solutions for data communications, telecommunications, computers, and instrumentation markets worldwide, in which legendary billionaire investor Ken Griffin's Chicago-based hedge fund Citadel Advisers, with $11 billion in assets under management, filed SEC Form SC 13G indicating that it holds 7.94 million or 5.2% of outstanding shares, an increase from the 2.35 million shares it reported holding at the end of Q1.
On top of these, institutional investors also indicated via their 13D/G filings over the past month that they cut their positions in the following tech sector companies:
- Marvell Technology Group (MRVL), that is a leading fabless semiconductor company that designs, develops and markets analog, mixed-signal, digital signal processing, and embedded and stand-alone ARM-based microprocessor IC's, used for high-speed, high-density, digital data storage and broadband digital networking markets, in which the world's largest and most prominent asset manager, Blackrock Inc., with over $3.5 trillion in assets under management, filed SEC Form SC 13G/A indicating that it holds 23.48 million or 4.2% of outstanding shares, a decrease from the 39.26 million shares it reported holding at the end of Q1.
- Altera Corp. (ALTR), that manufactures programmable logic devices, FPGAs, and application-specific ICs for telecom and industrial markets, in which Pasadena, CA-based mega fund PRIMECAP Management Co., with $67.2 billion in 13-F assets, filed SEC Form SC 13G/A indicating that it holds 14.93 million or 4.6% of outstanding shares, a decrease from the 18.43 million shares it reported holding at the end of Q1.
Credit: Fundamental data in this article and company descriptions are based on SEC filings, Zacks Investment Research, Yahoo, Thomson Reuters and Briefing.com. The information and data is believed to be accurate, but no guarantees or representations are made.
Disclosure: I am long ZNGA.
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Disclosure: I am long ZNGA.