In a report rolled out Wednesday, Barclays analysts Raimo Lenschow and Saket Kalia commented on the rumor about Paul Singer’s Elliott Associatespushing for a sale of Informatica Corporation (NASDAQ: INFA).
Analysts at Wedbush already weighed in on the situation, and said that plans to sell the company are “nonexistent.” They added: “management’s plans to invest in growth are counter to the path a company would take to cut costs ahead of a private-equity sale. Further, Informatica's management has a good reputation, allowing them room to make improvements without activist pressure.”
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However, Barclays’ view is somewhat different. Lenschow and Kalia say that “takeout candidate investors now face a decision whether to play for meaningful growth while sacrificing profitability in the near term, or to have the company work with Elliott Management to find a buyer.”
With Elliot owning more than 8 percent of Informatica Corporation, they “see the case for an LBO above the current stock price and [have] created an interactive LBO model to explore the investment case for a go-private transaction.” According to the report, their work “suggests that a valuation range of $42-$50 per share is plausible, but such a path would forsake the potential growth.”
The research firm maintains an Equal Weight rating on the stock and a $39 price target. The stock is trading just shy of $42 per share on Thursday morning.
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.