Ahmet Okumus‘ Okumus Fund Management significantly increased its stake in Lifelock Inc (NYSE:LOCK), according to a Schedule 13G filing with the Securities and Exchange Commission. The fund now owns about 5.19 million shares, up from 316,900 shares that it held at the end of the fourth quarter. This stake has given Okumus ownership of 5.5% of Lifelock’s outstanding common stock.
Although Lifelock Inc (NYSE:LOCK)’s fourth quarter EPS of $0.28 beat estimates by $0.01 and and revenues of $129.68 million were also $1.08 million higher than estimated, the stock is down about 16% year to date, mainly due to weak guidance for the first quarter. The company expects a net loss per share to be between $0.06 and $0.07, as opposed to the consensus EPS of $0.05. Ken Griffin’s Citadel Investment Group held a significant stake in Lifelock Inc (NYSE:LOCK), amounting to 1.65 million shares valued at $30.48 million at the end of last year.
Ahmet Okumus has quite an underdog story as he gave all he could to fuel his passion for trading on U.S. stock exchanges, which he realized when he visited the Istanbul Stock Exchange at the age of 16. He moved to U.S in 1989 to attend college with strong intentions of carving his niche on the investment scene. He did just that by setting up his own shop in 1997. Just one example of his valuation prowess from early years is the $15,000 that he invested in 1992, a stake that he got from his mother, and the investment ballooned to $6 million by early 2000. The value of the fund’s equity portfolio stood at $479.72 million by the end of 2014 with technology and finance sectors amassing 52% and 35% of the portfolio value respectively. Okumus initiated five new positions during the fourth quarter, the most prominent of which were Dover Corp (NYSE:DOV), Nuance Communications Inc. (NASDAQ:NUAN), and Jive Software Inc (NASDAQ:JIVE).
With respective market capitalizations of $1.34 billion and $380.9 million, both Lifelock and Jive Software are small cap companies. This category is of special interest to us, since through our research we have discovered that a strategy based on these small cap picks of hedge funds performs far better than the most popular companies among these investment firms, which are mostly large cap stocks. Our small cap strategy based on immitating most popular small-cap picks, which we have been sharing in our newsletters since 2012, beat the S&P 500 ETF (SPY) by a staggering 79.4 percentage points since August 2012 through March 2015 and returned 132% during that period.
Okumus purchased some 534,600 shares of Dover Corp (NYSE:DOV), valued at $38.12 million during the fourth quarter. The stake which formed 7.95% of the portfolio value was also the largest of Okumus’ new picks. Among over 700 hedge funds that we track, Jeffrey Gates’ Gates Capital Managemet and Ric Dillon’s Diamond Hill Capital held the highest stakes in the company amounting to 3.53 million shares and 3.07 million shares respectively.
