Bill Gates’ bullish view on U.K. based G4S is not shared by some of the most famous London based hedge funds. G4S plc (LON:GFS) is among the largest security firms in the world. Bill and Melinda Gates Foundation and Cascade Investment hold 38.75 million shares of the company, which is a 3.2 percent stake. The investment was recently increased by buying another 6 million shares.
Short Positions In G4S
Taking the opposing view, Lansdowne Partners declared a new short in G4S plc (LON:GFS) a couple of days ago. G4S provides secure solutions and cash solutions in a number of countries across the globe. G4S plc (LON:GFS) has become a popular short among large hedge funds in the U.K., and Marshall Wace and Egerton Capital also have negative bets on the company. All short bets in G4S were declared in the past few weeks. A total of 1.81 percent of G4S’ outstanding shares are held in short positions (close to $60 million).
G4S reported revenues of $7.5 billion in FY2012 and earnings of 0.21 per share, missing analyst expectations. G4S plc (LON:GFS) is listed in FTSE100 companies on London Stock Exchange and is the third largest private employer in the world, behind Wal-Mart Stores, Inc. (NYSE:WMT) and Foxconn Technology Co., Ltd. (TPE:2354). G4S employs 660,000 workers. The company lowered its earnings guidance for 2013 due to a loss of Dutch prison contracts and other reasons that were not mentioned.
London Olympics Fiasco
G4S plc (LON:GFS) had a spell of trouble due to its below par service delivery s during the London Olympics 2012. The company was unable to deploy the required number of security personnel to the Olympics, and in inquiries continued to deny that it had performed poorly. However later insiders revealed poor management of the contract by the security provider, which led to the CEO admitting that their work had been humiliating. G4S also appointed a new CEO after the fiasco—Nick Buckles resigned and was replaced by Ashley Almanza,
One of G4S plc (LON:GFS)’a leading competitors is Securitas AB (STO:SECU-B), a Swedish security solutions provider. Marshall Wace is betting against the company.
Shares of G4S plc (LON:GFS) are down 9.7 percent for the year, most of the decline was incurred in the past month.