York Capital's Latest Moves
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James Dinan founded his York Capital investment firm in 1991 with a mere $3.6 million; his firm now has some $15 billion in assets under management. Prior to starting York Capital, Dinan worked at DLJ for two years, and in merger-arbitrage at Kellner DiLeo. Outlined below are some of the buys and sells that York Capital made during the first quarter that I found interesting (check out York's portfolio).
In other big news, Yahoo! snatched up Tumblr, which has more than 100 million users and little revenue, for $1.1 billion late last month. This is another reason I would be hesitant about the stock. The $1.1 billion price tag is sizable and the success of the acquisition will be in large part a result of how Yahoo! goes about monetization.
The wrong route would be trying to squeeze revenue out of Tumblr immediately. The platform has a solid user base, but has much more room to grow and could be just what Yahoo! needs to break into mobile. Thus, Yahoo! must be willing to bide its time, much like Google has done with YouTube. Yahoo! is also one of the stocks that Passport Capital added to its portfolio last quarter (check out the others).
The poor economic environment and real estate crisis put a strain on CBRE over the past few years, but the company is rebounding nicely. The real estate servicer saw year-over-year EPS growth of 14% for 1Q 2013, 20% for 4Q 2012, 8% for 3Q 2012 and 20% for 2Q 2012.
Given the rebounding real estate market, improving vacancy rates and low-cost credit, the company should reward investors nicely over the interim. From a returns standpoint, CBRE has a return on equity that's impressive, at 25.5%, compared to the industry average of 20.7%. During the first quarter of 2013, CBRE signed 46 contract in its global corporate services, of which 22 were with new clients.
Vulcan is the largest producer of construction aggregates in the U.S. Aggregates include crushed stone, sand and gravel. Aggregates shipments are expected to grow by 1% to 5% in 2013, an increase from the 1% decline in 2012. One of the big tailwinds for Vulcan is the growing demand for highway construction, thanks to increased funding with a new highway bill. The 2012 multi-year highway bill is expected to provide the state transport departments with highway funding and increase demand for highway construction. Another positive for the company includes an improvement in residential housing.
In 2012, publicly funded construction accounted for approximately 54% of total aggregate shipments. Overall, this is a positive, where public spending tends to be more stable than the private sector. I think the focus on infrastructure spending will get more attention going forward, especially following the recent Washington bridge collapse.
Marshall Hargrave has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!