Following Eddie: Could Acxiom (ACXM) Be Worth A Look?

February 20, 2008 12:47 PM EST
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Price: $48.48 --0%

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Today, I want to take a look at small-cap company Acxiom (Nasdaq: ACXM), a stock hedge fund guru Eddie Lampert just disclosed a 3,293,989 share, or 4.3%, stake in.

Acxiom is a provider of customer and information management solution. The company has been impacted recently by difficulty in the financial services industry, which has seen customer of the company cut spending. Shares of the company are down 42% over the past year.

Why does Acxiom look interesting right now?

Here are our top five reasons:

1. In May of 2007, the company agreed to be acquired for $27.10 per share by Silver Lake and ValueAct. The merger was terminated in October. Today, the stock is less than $13 per share, which more than reflects the slowdown.

2. The company is cutting expenses. Right now the cuts are not helping due to customer pullbacks, but they could help expand margins significantly if revenue growth accelerates.

3. The CEO was buying stock recently, showing his long-term confidence.

4. The company has a $100 million buyback plan in place. The company has already repurchased $50.6 million of the $100 million.

5. Eddie, while he has had a few bad trades lately, is a proven investor. It looks like Eddie is here for the long term. Maybe you should be too.

Here is a link to Eddie Lampert's other holdings.

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