According to a recent filing with the Securities and Exchange Commission, Elliott Management Corporation, which is the management affiliate of the hedge fund Elliott Associates L.P. and Elliott International Limited, owns 7.1% of the common stock and equivalents of Citrix Systems Inc. (NASDAQ:CTXS). Collectively, Elliott and its funds own 5.47 million shares, including 4.0 million shares underlying currently exercisable options, constituting 3.4% of Citrix’s outstanding common stock. The collective also has economic exposure to an additional 3.7% of Citrix’s common shares. Additionally, activist investor Paul Singer, who is in charge of Elliott Management, sent a letter to Citrix’s board of directors claiming that the stock can achieve a price of $90 to $100 per share or more by the end of next year. According to Singer, this encouraging outcome can be achieved due to the fact that Citrix operates leading technology franchises in attractive markets, held back only by the company’s struggles to operate them efficiently throughout recent years.
An everyday investor does not have the time or the required skill-set to carry out an in-depth analysis of equities and identify companies with the best future prospects like a fund with the knowledge and resources of Elliott Management Corporation. However, it is also not a good idea to pay the egregiously high fees that investment firms charge for their stock picking expertise. Thus a retail investor is better off to monkey the most popular stock picks among hedge funds by him or herself. But not just any picks mind you. Our research has shown that a portfolio based on hedge funds’ top stock picks (which are invariably comprised entirely of large-cap companies) falls considerably short of a portfolio based on their best small-cap stock picks. The most popular large-cap stocks among hedge funds underperformed the market by an average of seven basis points per month in our back tests whereas the 15 most popular small-cap stock picks among hedge funds outperformed the market by nearly a percentage point per month over the same period between 1999 and 2012. Since officially launching our small-cap strategy in August 2012 it has performed just as predicted, beating the market by over 84 percentage points and returning over 142%, while hedge funds themselves have collectively underperformed the market (read the details here).
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Elliott Management Corporation currently manages two multi-strategy hedge funds, Elliott Associates L.P. and Elliott International Limited. Its flagship fund Elliott Associates L.P. was founded by its current CEO, Paul Singer, in 1977 and is consequently one of the oldest hedge funds ever. Elliott Management employs an activist investing approach, regularly accumulating substantial stakes in underperforming companies and endeavoring to push for changes. The management company run by Paul Singer has its headquarters in New York, with other offices in London, Tokyo and Hong Kong. Paul Singer’s performance as a money manager is undoubtedly worthy of praise, with his firm delivering an annualized compounding return of 14.6% since the fund’s inception. According to its most recent 13F filing, Elliott Management Corporation manages a public equity portfolio worth $8.12 billion, while its largest stakes include a 17.80 million share position in Hess Corporation (NYSE:HES) valued at $1.21 billion and a 39.24 million share stake in Juniper Networks Inc. (NYSE:JNPR) valued at $886.06 million.
Citrix Systems Inc. (NASDAQ:CTXS) is an American multinational software company that is leading the transition to the software-defined workplace (all-digital virtualized workspace) from traditional physical spaces. The company provides desktop virtualization, networking, software-as-a-service (SaaS), and cloud computing technologies that enable new ways for businesses and people to work more efficiently. The stock has increased by slightly more than 10% year-to-date and has skyrocketed by almost 7% since the opening hours of today’s trading session. Leaving aside the letter received by Citrix from Paul Singer, there are other positive news updates the company has been surrounded by lately. For instance, Citrix announced a few weeks ago that its leading networking solution called NetScaler is approved to operate on Mirantis OpenStack distribution. The newly approved certification of NetScaler is part of the Mirantis Unlocked partner program, which allows the two companies to cooperate and provide a wider portfolio of products. Having said that, the newly-announced cooperation will most probably unlock a new revenue stream for Citrix and will increase the availability of its services and products.
At the beginning of May, Citrix also announced the launch of its newly-designed platform Citrix Workspace Cloud, which is intended to simplify the on-demand delivery of a wide range of IT tools and services. Generally, businesses and people want instant access to all of the apps and data required for their activities, and the Citrix Workspace Cloud will allow them to get that access from any device and location. The cloud-based management platform offers Citrix’s customers the flexibility to choose the clouds and datacenter resources that they need, and pick the applications, data, files and other features that suit each organization’s needs. Unquestionably, the workplace is undergoing important changes from a physical workspace to a software-defined workspace and Citrix might benefit substantially from that current trend in the future. The company’s outlook appears quite strong, so Citrix shares could keep rising in the upcoming months and years.
Additionally, Citrix has delivered strong financial performance during the most recent fiscal quarter, which signals that the company has been successful in catching the benefits from the major changes in the workplace management industry. Precisely, the company generated revenues from workspace services of $391 million during the first quarter of 2015, which marks an increase of 2% from the same period a year ago. The company’s revenues from its delivery networking amounted to $161 million, reaching an increase of 3% year-over-year; while the revenues from its mobility apps reached an increase of 8% year-over-year, reaching a figure of $169 million. In the meantime, other reputable hedge funds including Bain Capital’s subsidiary Brookside Capital and D E Shaw, founded by D. E. Shaw own sizable stakes in Citrix Systems Inc. (NASDAQ:CTXS), the former owning 3.67 million shares valued at $234.41 million.
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