Yahoo Finance JANA adds significant new position in NCR Corporation
JANA Partners reveals 4Q14 holdings: What's new and what's gone? (Part 2 of 11)
Activist fund JANA adds new position in NCR
JANA Partners added a significant stake in NCR Corporation (NCR). The position accounted for 3.27% of the fund’s total fourth-quarter portfolio.
NCR has a 0.14% exposure to the iShares U.S. Technology ETF (IYW). The ETF has exposure to US electronics, computer software and hardware, and informational technology companies.
Overview of NCR Corporation
NCR Corporation (NCR), based in Duluth, Georgia, is a provider of consumer transaction technologies. It offers software, hardware, and a portfolio of services that enable more than 550 million transactions daily across retail, financial, travel, hospitality, telecom, technology, and small businesses.
NCR manages and reports its businesses in the following four segments:
Financial Services. This segment includes a comprehensive line of automated teller machines (or ATMs) and payment processing hardware and software, cash management, video banking and customer-facing digital banking software, and related installation, maintenance, and managed and professional services.
Retail Solutions. This segment includes retail-oriented technologies such as point-of-sale terminals and point-of-sale software, an omni-channel retail software platform with a comprehensive suite of retail software applications, innovative self-service kiosks such as self-checkouts, and bar-code scanners.
Hospitality. This segment includes point-of-sale hardware and software solutions, installation, maintenance, managed and professional services, and a complete line of printer consumables.
Emerging Industries. This segment includes maintenance as well as managed and professional services for third-party computer hardware provided to select manufacturers, mainly in the telecom industry. It also offers solutions designed to enhance the customer experience for the travel and gaming industries, including small kiosks, and for the small business industry, including an all-in-one point-of-sale solution.
NCR sees activist pressure from Marcato
Last year, another activist hedge fund, Marcato Capital Management, acquired a stake in NCR via a 13D filing. Marcato stated in its SEC filing that NCR’s shares “were undervalued and represented an attractive investment opportunity.” NCR later said it appointed Marcato founder Richard “Mick” McGuire to its board.
Revenue growth led by software-related revenue, especially Cloud
NCR’s 4Q14 revenues were in line with Wall Street estimates. Revenue grew 6% to $1.77 billion, up 11% constant currency. It saw a 32% growth in software-related revenue to $477 million, including 231% growth in Cloud revenue to $129 million.
The revenue growth was led by NCR’s Financial Services segment where branch transformation revenues continued to increase. NCR said its Retail Solutions segment was lower than the prior year as it “continued to face redirected information technology spending and delayed customer rollouts. Hospitality was lower due to decreased spend by certain global quick-service restaurants. Emerging Industries was lower due to the impact of the travel business.” Revenue was also impacted by foreign currency fluctuations by 5%.
JANA’s 4Q14 positions
JANA Partners added new stakes in NCR Corporation (NCR), SolarCity Corporation (SCTY), Computer Sciences Corporation (CSC), and Salix Pharmaceuticals, Ltd. (SLXP). It sold stakes in Equinix, Inc. (EQIX), Cameron International Corporation (CAM), Dollar General Corporation (DG), and QEP Resources Inc. (QEP). It added to its stakes in Hertz Global Holdings, Inc. (HTZ) and Valeant Pharmaceuticals (VRX).
In the next part of this series, we’ll talk about JANA Partners’ new position in SolarCity Corporation (SCTY).
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