The Advisory Board Company (Nasdaq: ABCO) Boosted by Elliott Hedge Fund Stake

The Advisory Board Company – Nasdaq: ABCO

Renowned hedge fund Elliott Management Corporation has today disclosed an 8.3% stake in The Advisory Board Company and described its shares (Nasdaq: ABCO) as “undervalued”. In response, the shares (Nasdaq: ABCO) gapped up from their Wednesday close of $36.15 and have climbed over 15% in today’s trading.

The Advisory Board Company’s offers cloud-based business intelligence and software applications that allow members to combine insights derived from best practices research with their operational and financial data to identify and assess revenue, cost-saving, or performance improvement opportunities; and consulting and management services that provide on-the-ground support for turnaround and performance improvement initiatives, as well as best practice and day-in-day-out professional management of the hospital or medical group areas.

Elliott Management Corporation is noted for its relatively high returns and low volatility. The New York Times has called its founder, Paul Singer, “one of the most revered” hedge fund managers on Wall Street. Elliott returns have generally outpaced the annual growth of the S&P 500. Describing Singer in 2012 as “one of the smartest and toughest money managers in the business,” Fortune noted that over the previous 35 years, he had “produced an extraordinary 14% average annual return after fees, nearly double the price appreciation of the S&P 500.” From inception, Elliott has generated for its investors a 14.6% net compound annual return, compared to 10.9% for the S&P 500 stock index, while having only one-third of the index’s volatility. The firm is currently closed to new investors. As of mid-2008, Elliott counted 175 employees in New York City, London, Tokyo, and Hong Kong and is one of the oldest hedge funds under continuous management.

Last year The Advisory Board Company posted it largest EPS loss of the last four years (-$2.84) at the same time it posted its largest sales figures ($768 million). Seventeen firms follow The Advisory Board Company and nine give ABCO a rating of “Strong Buy”, seven give it a “Hold” rating, and one gives ABCO a “Underperform” rating.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

Ticker Symbol ABCO
Last Price a/o 1:23 PM EST  $                    41.63
Average Volume 501,000
Market Cap $1.45 Billion
Sales $803 million
Shares Outstanding 40.1 million
Share Float 6.76
Shortable Yes
Optionable Yes
Inside Ownership 0.30%
Short Float 6.76%
Short Interest Ratio 5.35
Quarterly Return -15.97%
YTD Return 8.72%
Year Return -22.34%

Author: Marcus Anderson

Marc Anderson is a pseudonym. Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.

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