Hillshire Brands Co (HSH), Iron Mountain Incorporated (IRM): Billionaire Israel Englander Catapults New Stocks

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Over 80% of the company’s stores have commercial delivery programs in place. What’s more is that the company’s acquisition of BWP Distributors will help it to further tap the commercial segment. The acquisition is expected to add roughly $170 million to $180 million in revenue in 2013. The other long-term revenue driver for Advance should be industry tailwinds, where two-thirds of the vehicles on the road are more than seven years old.

At the end of the first quarter, there were a total of 38 hedge funds long the stock. Ricky Sandler’s Eminerce Capital had the most valuable position, worth close to $214.9 million and making up comprising 5.6% of its total 13F portfolio (check out Eminence’s portfolio).

More M&A
NYSE Euronext (NYSE:NYX) was a 214% increase in shares owned and now makes up Catapult’s fourth position in its portfolio. At the end of 2012, NYSE announced plans to be bought by IntercontinentalExchange Inc (NYSE:ICE) for $8.2 billion. Following the acquisition, NYSE will own 36% of IntercontinentalExchange Inc (NYSE:ICE). Investors have three options for the deal, with the best being to receive 0.2581 shares of IntercontinentalExchange, which would be worth $43.86 and is 9.4% upside from where NYSE currently trades. Going forward, even without the acquisition, NYSE should perform well on the back of an improving economy, which will help boost the demand for equity investments and increase the IPO pipeline.
Iron Mountain Incorporated (NYSE:IRM) was a new addition to Catapult’s portfolio and makes up its fifth-largest holding. Iron Mountain Incorporated (NYSE:IRM) provides information protection and storage services, with 73% of revenue coming from records management, 18% from data protection and 9% from information destruction services. The company also has a diverse customer base that includes commercial, legal, financial services, healthcare, entertainment and government organizations.

The big news of late for Iron Mountain Incorporated (NYSE:IRM) is its plan to convert to a REIT at the beginning of 2014. The stock currently pays a 2.9% dividend yield. The REIT structure makes sense given that Iron Mountain Incorporated (NYSE:IRM) has an impressive business thanks to its recurring revenue base. The company derives the majority of its revenue from fixed periodic storage-rental fees, where storage rentals accounted for 55% of revenue over the last three years, having grown at a compounded annual growth rate of 5.0% over the same period.

Bottom line
Billionaire Englander’s Catapult is dabbling in the merger-arbitrage area with bets on Virgin Media and NYSE Euronext (NYSE:NYX), an area most investors don’t have enough capital to deploy to make the strategy fruitful. Meanwhile, I think Hillshire might be overvalued at current levels, but Advance looks to be a solid investment with industry tailwinds. I am also encouraged by Iron Mountain’s prospects given its recurring cash flow and REIT conversion.


Marshall Hargrave has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.
Marshall is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article Billionaire Israel Englander Catapults New Stocks originally appeared on Fool.com is written by Marshall Hargrave.

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