As stated in a Form 4 filing, Jeffrey Ubben’s ValueAct Capital sold 650,000 shares of Msci Inc. (NYSE:MSCI) on Monday and Tuesday at a weighted average price of $69.98, trimming its overall holdings in the company to 6.33 million shares. The shares of the provider of portfolio construction and risk management tools and services are up 46% for the year, and are trading at a relatively rich trailing price-to-earnings ratio of 36.65, which compares with the ratio of 23.18 for the S&P 500 Index. Msci Inc. (NYSE:MSCI) has invested substantial amounts of capital towards expanding its operating functions and infrastructure in order to accelerate its top- and bottom-line growth. The company’s investment growth has exceeded the growth of its revenue in recent years, which has in turn impacted its operating profit. For example, MSCI’s revenues increased by an annual 9.1% in 2014, whereas its operating income shrank by 0.9% relative to the same period. The company’s total operating revenues added up to $268.8 million for the third quarter of 2015, up by 6.8% year-over-year. Leaving MSCI’s financial performance aside, it appears that ValueAct is taking some profits off the table from its long-term investment in the company.
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Meanwhile, the smart money sentiment was positive on MSCI in the third quarter, as the number of hedge funds invested in the company inched up to 26 from 24 during the three-month period. Nevertheless, the value of their investments shrank to $1.07 billion from $1.19 billion. Anand Desai’s Darsana Capital Partners owns 1.60 million shares in Msci Inc. (NYSE:MSCI) as of September 30.
In a separate Form 4 filing, Quincy J. Lee’s Teton Capital Partners has reported acquiring 57,916 class B shares of Rush Enterprises Inc. (NASDAQ:RUSHB) at $22.65 apiece, boosting its stake to nearly 1.11 million shares. The struggling energy industry has affected the business operations of this full-service retailer of commercial vehicles and related services quite significantly. The stock is 28% in the red year-to-date, but it is trading at an appealing trailing P/E ratio of only 11.69. Rush Enterprises Inc. (NASDAQ:RUSHB)’s gross margins from truck lease and rental sales equaled 10.7% in the September quarter, down from the 15.2% figure reported a year ago. This substantial decrease was mainly attributable to the sluggish activity in the energy sector. Even so, the company’s strong sales of Class 4 through 7 vehicles, fast-increasing fleet business and revenues from Aftermarket Services from the non-energy focused regions offset some of the sustained decline in energy sector activity.
Despite the cheap trailing P/E ratio of the company, Rush Enterprises lost some of its charm within the hedge fund industry during the third quarter. The number of hedge funds with positions in the company decreased to 11 from 16 quarter-over-quarter, while the value of these positions shrank to $25.93 million from $33.20 million. SG Capital Management, founded by Ken Grossman and Glen Schneider, added a 285,674-share position in Rush Enterprises Inc. (NASDAQ:RUSHA) to its equity portfolio during the September quarter.
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